Density is the most important congestion indicator among fundamental traffic flow variables—flow, speed, and density. Measuring density by aerial monitoring, although accurate, cannot be widely used because of its cost and dependency on weather. The conventional method, estimating density based on the relationship between traffic flow and speed as measured by a point detector, does not yield an accurate density value, because the flow is not homogeneous. A new and advanced density measurement method, which is based on the in-out counting method, is proposed. This method uses average density instead of instantaneous density. By using two point detectors, this method can capture considerable variation in density and is accurate for single and multilane freeway segments. Establishing the number of floating vehicles necessary to obtain a fair approximation of the true density is for future research. Copyright © 2011 John Wiley & Sons, Ltd.