The FHWA's role in the Federal-aid Highway Program is to oversee federal funds to build and maintain the National Highway System (primarily Interstate highways, U.S. highways and most state highways). This funding mostly comes from the federal gasoline tax and mostly goes to state departments of transportation. The FHWA oversees projects using these funds to ensure that federal requirements for project eligibility, contract administration and construction standards are adhered to.

Under the Federal Lands Highway Program (sometimes called "direct fed"), the FHWA provides highway design and construction services for various federal land-management agencies, such as the Forest Service and the National Park Service. The FLHP also jointly administers the Indian Reservation Roads Program.

In addition to these programs, the FHWA performs and sponsors research in the areas of roadway safety, congestion, highway materials and construction methods, and provides funding to local technical assistance program centers to disseminate research results to local highway agencies.

The FHWA also publishes the Manual on Uniform Traffic Control Devices (MUTCD), which is used by most highway agencies in the United States. The MUTCD provides such standards as the size, color and height of traffic signs, traffic signals and road surface markings.

Long-Term Pavement Performance (LTPP) is a program supported by the FHWA to collect and analyse road data. The LTPP program was initiated by the Transportation Research Board (TRB) of the National Research Council (NRC) in the early 1980s. The FHWA with the cooperation of the American Association of State Highway and Transportation Officials (AASHTO) sponsored the program. As a result of this program, the FHWA has collected a huge database of road performance. The FHWA and the ASCE hold an annual contest known as LTPP International Data Analysis Contest, which is based on challenging researchers to answer a question based on the LTPP data.
In 2010, FHWA launched the Every Day Counts (EDC) initiative to identify and deploy innovations to reduce project delivery time, enhance safety, and protect the environment. EDC is a state-based model that rapidly deploys proven, yet underutilized innovations. FHWA works with State transportation departments, local governments, tribes, private industry, and other stakeholders to identify a new collection of innovations to champion every two years that merit accelerated deployment. Among the approaches promoted by the EDC effort are: adaptive traffic control to reduce fuel consumption and improve travel time reliability; alternative intersection design; prefabricated bridge elements and systems; high-friction surface treatments; warm mix asphalt; ultra-high-performance concrete; virtual public involvement; and time-saving strategies such as rapid bridge replacement. Since the inception of EDC, each state has used 26 or more of the 57 innovations and some states have deployed more than 45. Many of these practices have become mainstream practices across the country.

The Federal Highway Administration is overseen by an administrator appointed by the President of the United States by and with the consent of the United States Senate. The administrator works under the direction of the Secretary of Transportation and Deputy Secretary of Transportation. The internal organization of the FHWA is as follows:
• D. Grant Mickle October 27, 1961 – January 20, 1964
• Lowell K. Bridwell (acting) January 20, 1964 – March 23, 1967
• Ralph Bartelsmeyer August 10, 1970 – January 25, 1974
• Joseph R. Coupal Jr September 30, 1974 – 1977
• Karl S. Bowers June 5, 1977 – August 3, 1978
• John S. Hassell, Jr. August 31, 1978 – July 11, 1980
• Alinda Burke August 8, 1980 – ?
• Lester P. Lamm September 17, 1982 – 1986
• Robert E. Farris August 8, 1986 - June 8, 1988
• Eugene R. McCormick June 30, 1989 - ?
• Gloria J. Jeff December 19, 1997 – January 3, 1999
• Walter Sutton Jr (acting) January 3, 1999 – May 3, 2000 May 3, 2000 – January 2001
• J. Richard Capka August 5, 2002 – May 31, 2006
• Kerry O'Hare November 10, 2008 – January 20, 2009
• Gregory G. Nadeau July 8, 2009 – July 30, 2014
• Brandye Hendrickson July 24, 2017 – July 19, 2019
• Mala Parker October 10, 2019 – January 20, 2021
• Stephanie Pollack January 27, 2021 – February 1, 2023
• Andrew Rogers February 27, 2023 – January 2024
• Kristin White May 20, 2024 – December 16, 2024
• Gloria Shepherd (acting) December 17, 2024 – Incumbent
• Lester P. Lamm, August 8, 1973 – ?
• Thomas D. Everett, October 22, 2018 – June 30, 2022
• Mayela Sosa (Acting), June 30, 2022 - October 20, 2022
• Gloria M. Shepherd, October 20, 2022 - Current