In recent years, global warming and energy shortage have become very important issues in the international agenda. Interestingly, these two issues are highly related, because energy consumption usually produces carbon dioxide (CO2) which is the major cause of climate change. According to the statistical report of International Energy Association, the transportation sector is one of the major sources of CO2 emission. Furthermore, the transportation sector is the second largest energy consuming sector in Taiwan according to analyzing results of this study. The objectives of this study are to investigate vehicular activity and energy consumption of passenger and freight transportation, and passenger-kilometers traveled and tonnage-kilometers traveled were estimated for various transportation systems. Log Mean Divisia Index Method was adopted to analyze the effects of activity level, market share and energy intensity of various transportation systems on energy consumption of passenger and freight transportation. It was concluded that activity level and energy intensity have significant impacts on energy consumption than market share. The highway system plays a crucial role in energy consumption of passenger and freight transportation sector.