In this paper, a novel approach is developed using Fuzzy ARTMAP Neural Networks to recognize and classify Swedish road and traffic signs. The Swedish Speed-Limit signs are selected as a case study, but the system can be applied to other signs. A new color detection and segmentation algorithm is presented in which the effects of shadows and highlights are eliminated. Images are taken by a digital camera mounted in a car. Segmented images are created by converting RGB images into HSV color space and applying the shadow-highlight invariant method. The method is tested on hundreds of outdoor images under shadow and highlight conditions, and it shows high robustness; in 95% of cases of correct segmentation is achieved. Classification is carried out by two stages of Fuzzy ARTMAP which are trained by 210 and 150 images, respectively. The first stage determines the border of the sign and the second stage determines the pictogram. Training and testing of both stages are made offline, using still images. In online mode, the system loads the Fuzzy ARTMAP and performs recognition process. An accuracy of 96.7% is achieved in Speed-Limit recognition and more than 90% as whole accuracy.