This paper presents a cost-benefit based approach to the problem of finding the optimal location and density of road weather information system (RWIS) stations over a regional road network. The novelty of the proposed method lies in the models that can be used to estimate the benefits of RWIS information, including reduced maintenance costs and collisions, thus determining the optimal number and location of a RWIS network. A case study based on the existing RWIS network in Northern Minnesota in the US is used to show the application of the proposed approach. Linear regression models are developed for the annual maintenance costs and the expected number of collisions that could occur on two types of highways delineated by the existence of a RWIS station nearby. The calibrated models are then applied to individual highway segments defined on the basis of a uniform grid system to determine the expected benefit of having a RWIS station installed. These benefits along with RWIS installation and maintenance costs are converted into net benefits and then the net present value, which are then used in determining the optimal number of RWIS stations and prioritizing the candidate locations. It was found from the case study that a total of 45 stations would provide the best return of investment with a 25-year net benefit of approximately $6.5 million and a life-cycle benefit-to-cost ratio of 3.5.