Traffic conditions in India and many of the developing countries differ from the western country mainly in the composition and lane discipline. Under such conditions, vehicles widely varying in their size, accelerating abilities, and performance capabilities are to share same lanes of the road, which is highly heterogeneous in nature. Especially at signalized intersections. Hence, Passenger Car Unit (PCU) values of several vehicles do not remain static. Recent research works show that the PCU of any type of vehicle can be different at different traffic composition and volume level which points towards the importance of the concept of dynamic PCU. Different methods are used for estimation of PCU by some researchers on signalised intersection under mixed traffic conditions. Objective of the present study is to estimate dynamic PCU values of different vehicle categories at signalised intersection under mixed traffic conditions by Area Occupancy Method. Effect of traffic characteristics on the dynamic PCU value is also analysed. With the use of estimated dynamic PCU by Area occupancy method, mathematical model is developed for estimation of dynamic PCU using regression technique. From the study it was observed that with the increase in vehicle composition dynamic PCU value also increased and the increase in lane width, dynamic PCU value of two wheelers decreased. The lane width and dynamic PCU values of two wheelers is found to have a negative correlation. Mathematical model was developed for the estimation of dynamic PCU of various categories of vehicles using regression by in cooperating the effect of traffic composition and lane width and cycle time.