The maximum capacity, cost, and safety of an automated highway system are largely dependent on the selected headway policy, i.e., the specification of a minimum acceptable headway (as a function of speed) for mainline operations. Here a policy, designed to avert collisions due to "reasonable" lead-car decelerations, is presented and evaluated in the context of achieving high capacity (≥3600 vehicle/lane/hr) over a range of typical highway speeds-13.5 to 30 m/s (30.2 to 67.2 mi/h). This involved a detailed analysis to determine both the relationships between, and the requirements on, the seven parameters which are embedded in this policy. These pertain to systems-level operations, the capabilities of a vehicle's automatic control system, and the vehicle/ roadway interface. The trade-offs associated with safety, capacity, and cost (in the form of required future development efforts) are identified, and three general approaches to selecting parameters for an operational system are specified.