Highway vehicle emissions can result in adverse health problems to nearby residents and workers, especially during traffic congestion. In response, the policy to implement electronic toll collection (ETC) has helped alleviate traffic congestion, as compared to manual toll collection (MTC) and has led to reduced air pollution and improved public health. However, the effect of ETC in reducing particulate matter polluting the air is not well understood, especially in the ultrafine particle (UFP) range (particle diameter <100 nm). To the best of our knowledge, this is the first study to investigate how ETC affects the traffic pattern and air quality, especially UFP and PM2.5. We selected a site in Tainan, Taiwan, and measured UFP and PM2.5 concentrations before and after the construction of the ETC system. The computed traffic volumes during peak travel periods (7:00 AM to 9:00 AM and 4:00 PM to 6:00 PM) respectively, accounted for approximately 23-25% and 14-18% before and after the implementation of ETC, indicating that peak traffic volumes were more homogeneous after ETC. Moreover, the results indicate that the full implementation of ETC can help reduce UFP number concentrations and PM2.5 mass concentrations in the highway downwind area by 4 × 103 #/cm3 and 20.5 μg/m3, respectively. After the full implementation of the ETC, significant reductions in both the UFP number concentration and PM2.5 mass concentration were seen. Furthermore, excessive lifetime cancer risks (ELCR) from exposure to PM2.5 and UFP together were reduced 49.3% after the implementation of the ETC. Accordingly, ETC not only helps alleviate traffic congestion but also reduces traffic emissions and lifetime cancer risk for people living or working near highways.