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This paper presents a novel automatic and dynamic camera calibration algorithm based on traffic visual surveillance. The algorithm can automatically calibrate the intrinsic and extrinsic parameters of camera, and offer enough guarantee to extract traffic real-time parameters. This paper firstly indicates the significance of applying automatic and dynamic calibration algorithm to intelligent transportation system, then establishes a mathematical model of calibration parameters between camera image and actual road. The algorithm is established from three view points, which are description, flow chart and algorithm description. Afterward this paper describes the experimental method and result based on this novel algorithm. Finally this paper indicates wide application foreground of this algorithm in intelligent transportation system.