Traffic congestion on road networks is one of the most significant problems that is faced in almost all urban areas. Driving under traffic congestion compels frequent idling, acceleration, and braking, which increase energy consumption and wear and tear on vehicles. By efficiently maneuvering vehicles, traffic flow can be improved. An Adaptive Cruise Control (ACC) system in a car automatically detects its leading vehicle and adjusts the headway by using both the throttle and the brake. Conventional ACC systems are not suitable in congested traffic conditions due to their response delay. For this purpose, development of smart technologies that contribute to improved traffic flow, throughput and safety is needed. In today’s traffic, to achieve the safe inter-vehicle distance, improve safety, avoid congestion and the limited human perception of traffic conditions and human reaction characteristics constrains should be analyzed. In addition, erroneous human driving conditions may generate shockwaves in addition which causes traffic flow instabilities. In this paper to achieve inter-vehicle distance and improved throughput, we consider Cooperative Adaptive Cruise Control (CACC) system. CACC is then implemented in Smart Driving System. For better Performance, wireless communication is used to exchange Information of individual vehicle. By introducing vehicle to vehicle (V2V) communication and vehicle to roadside infrastructure (V2R) communications, the vehicle gets information not only from its previous and following vehicle but also from the vehicles in front of the previous Vehicle and following vehicle. This enables a vehicle to follow its predecessor at a closer distance under tighter control.