In this paper we have discussed about the problem of traffic and how to solve it using WSN and IOT. As we know IOT is the latest technology and is being used in many sectors now a days at it very effective. As we know the problem of traffic management is increasing now a days is big cities which causes many problems like traffic, accidents and pollution. Management of the traffic is very important and a tedious job. There have been many methods used to solve this Problems. Also the issues like car theft have also increased now a days, also due to high traffic ambulance also have problems in reaching the hospitals fast. In this paper we have discussed the technique of solving this problems using IOT. There will be a sensor node and a base node the sensor node will be used to count the traffic in each lane and will send the information to the base node and the base node will take the decision of allocation of the. Also the base node will have a RFID reader connected which will be continuously Reading for the RFID cards that will be present at the cars and compare it with the data base and search for the stolen cars and ambulance, and will notify after the stolen car is detected. This will help solving the traffic management problem the theft problem and the emergency situations for the ambulance.