This paper introduces computational fluid dynamics (CFD), a numerical approach widely and successfully used in aerospace engineering, to deal with surface traffic flow related problems. After a brief introduction of the physical and mathematical foundations of CFD, this paper develops CFD implementation methodology for modeling traffic problems such as queue/platoon distribution, shockwave propagation, and prediction of system performance. Some theoretical and practical applications are discussed in this paper to illustrate the implementation methodology. It is found that CFD approach can facilitate a superior insight into the formation and propagation of congestion, thereby supporting more effective methods to alleviate congestion. In addition, CFD approach is found capable of assessing freeway system performance using less ITS detectors, and enhancing the coverage and reliability of a traffic detection system.