The proposal for enhancement of the traffic conditions in the city of Matulji was based on a detailed current state traffic analysis and conditions for all forms of traffic in the residential area. The field research of circumferential roads, intersections and ways of traffic were conducted before a detailed analysis. Using the obtained data, a detailed analyisis of the current situation of entire area has been conducted. One of the main tasks of this study was to examine feasibility of roundabout implementation in the northeast area of analysed zone. The analysis shows that the construction of the roundabout is not justified. In addition, analysis identified and gave a solution to several problems; lack of sidewalks , improper parking, excessive speed at the entrance to the city, lack of parking spaces, and insufficient level of service for specific directions on intersections. Analysis of existing spatial documentation and other documents with the focus on their traffic solution was made after traffic analysis. Based on these analyzes suggestions are given to improve network of roads within the city of Matulji. The solution is planned in two phases; First, which includes minimal intervention with a focus on transport solution along the state road D8, and second more complex phase, which requires construction of new sections of the road and regulation of the direction of traffic. In the first phase focus lays on reconstruction of intersections on state road and improvement of the safety and quality of pedestrian traffic. The second phase is much more complicated and therefore more expensive. The construction of two new sections of road in the center of City of Matulji plans to regulate traffic on certain roads from two-way to one-way and the establishment of circular flow of traffic in the center of the town.