The purpose of this study was to develop a procedure for estimating future rail traffic that considers the relationship between the structure of a state's economy and rail freight traffic. The study expands the use of input-output models to include the forecasting of transportation demand. Georgia and Michigan case studies were used to test the forecasting capability of the input-output procedure. For Michigan's 1980 rail movements, the model predicted rail traffic to within 0.15 percent of actual traffic. For 1979 Georgia traffic, the model predicted within 4.3 percent of actual traffic. Various statistical tests indicate that the procedure was effective in forecasting rail freight traffic.