The image processing is used as wide applications for different sectors in day to day life. Use of digital image processing is presented for analysis of traffic in the cities by using two dimensional signals the images are analysed using manipulating images with the computer. The algorithm of DCT has been used for analysis purpose based on DCT technology. The steps of image acquisitions, Image enhancement, restoration, colour processing and comparison is used for typical analyses. The satellite images of the city taken at typical time can be analysed and traffic scenes can be detected by using a program. These images will give the clear idea to detect traffic signs and pattern of a particular city.