Time headway is an essential variable in various traffic engineering applications such as capacity and level of service (LOS) analyses of road segments and intersections, traffic safety analysis, generation of vehicles in microscopic simulations, and so on. From the context of LOS analysis of road segments, the proportion of traffic traveling with headways less than 3 seconds at a point is used as a criterion for assessing the operational performance of two-lane highways. Generally, headways are measured based on spot observation as the time interval between two consecutive vehicles passing a common point of a road. Spot measurement has been identified as the major problem associated with headway data collection as the approach does not consider the variation of the headways along the road segment. It is therefore, essential to develop other techniques for estimating headway along road section as opposed the current practice of spot measurement and deemed applicable for longer segment. This paper presents a new approach for measuring time headway based on space observation using test vehicle method. Field data on time headways were collected on two-lane highways using both spot and space observations and the results compared. Statistical analysis using t-test indicates that the two data sets do not differ significantly