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The main purpose of this study is to design a transit network of routes for handling actual-size road networks. This transit-network design problem is known to be complex and cumbersome. Thus, a heuristic methodology is proposed, taking into account the major concerns of transit authorities such as budget constraints, level-of-service standards and the attractiveness of the transit routes. In addition, this approach considers other important aspects of the problem including categorization of stops, multiclass of transit vehicles, hierarchy planning, system capacity (which has been largely ignored in past studies) and the integration between route-design and frequency-setting analyses. The process developed starts with the construction of a set of potential stops using a clustering concept. Then, by the use of Newton gravity theory and a special shortest-path procedure, a set of candidate routes is formed, categorized by …