The applicability of the real-options approach to risk management to the metropolitan transportation planning process is described. The options approach to risk analysis brings to investment decisions the insight that there is an inherent value in option-creating actions (by resolving uncertainty, enabling flexibility, or uncovering new and relevant information) and a cost associated with exercising options (irreversible commitments of resources and time). The options approach moves investment decision making from simply choosing whether to build a project to a regime that considers a range of possible decisions, with the potential value of each decision measured in terms of its option-creation value and irreversible commitment cost. This approach is specifically designed to maximize the value of investments having the characteristics of transportation projects that are subject to uncertainty and risk in their outcomes. Also described is the new options approach; examples that illustrate the value of different kinds of options are given. By recognizing the value of improved information--and actions to obtain it--the options approach can give real impetus to improved planning methods. Because the analysis tools provided by the options approach make it possible to value the additional information that improved planning can provide, recommendations are provided on how--and in what parts of the metropolitan transportation planning process--the new tools of risk analysis can most appropriately be applied.