Method and arrangement for setting a speed limit for vehicle travelling on a road includes monitoring conditions of the road, determining a speed limit for travel of vehicles on the road based on the monitored conditions, and transmitting the determined speed limit to the vehicles to thereby notify operators of the vehicles of the determined speed limit. Monitoring conditions of the road may entail monitoring weather conditions around the road, monitoring visibility for operators of the vehicles on the roads, monitoring traffic on the road, monitoring accidents on the road or emergency situations of vehicles on the road and/or monitoring the speed of vehicles travelling on the road and a distance between adjacent vehicles.