The first traffic lights were installed near the British Houses of Parliament in London in 1868. With semaphore arms and red and green gas lamps for night use these lights resembled the railway signals. In 1869, this crude traffic light exploded, injuring the policeman who was operating it.

The modern electric traffic lights were invented by William Potts of Detroit Police Department. In fact, he adapted the railroad lights for street use – in this system red, yellow, and green meant "stop", "caution", and "all clear" respectively.

The first automatic timing device installed in 1920 at Woodward and Michigan Avenues in Detroit cost $37. Within a year, Detroit had installed a total of fifteen of the new automatic lights and all of them were controlled manually from a tower at Woodward and Michigan.

Today the red light contains some orange in its hue, and the green light contains some blue to make distinguishing them easier for people with red-green color blindness.

In the mid 1990s, the incandescent or halogen light bulbs in traffic lights were replaced with the cost-effective light emitting diodes (LEDs) which have many advantages, including longer lifetime, brighter illumination and much faster switching.

The traffic lights nowadays are usually controlled automatically taking into account the traffic needs. One of the control patterns is known as "green wave": in this pattern a series of traffic lights (usually three or more) are coordinated to allow continuous traffic flow over several intersections in one main direction. In modern coordinated signal systems it is possible for drivers to go many miles without stopping at red light if their speed is lower than a given limit, mostly 50 km/h in urban areas. In many cities there are signs displaying how fast one has to drive in order to reach the next intersection at the exact time when the light turns green.

Article about the first traffic lights from Motor News, March 1947