In this paper, we show the outline of our research on interactive traffic environment, under which we are developing mixed reality traffic experiment space. In order to develop sophisticated ITS applications, it is very important to analyze human factor, but there is few method to obtain human factor, thus, we have decided to create interactive traffic environment under which we can obtain human factors. As the first stage of our research, we have developed Mixed Reality Traffic Experiment Space. It consists of Real Observation Laboratory Part and Virtual Experiment Laboratory Part. In the former part, we gather various real raw data to retrieve real environment model. In the later part, we present users more realistic driving environment based on the model. Based on this experiment space, we are going to proceed to the next stages, in which we will design and evaluate sustainable ITS applications. For this purpose we have started Sustainable ITS Project at the university of Tokyo, collaborated among industry, government, and university.