Estimation of time-dependent arterial travel time is a challenging task because of the interrupted nature of urban traffic flows. Many research efforts have been devoted to this topic, but their successes are limited and most of them can only be used for offline purposes due to the limited availability of traffic data from signalized intersections. In this paper, we describe a real-time arterial data collection and archival system developed at the University of Minnesota, followed by an innovative algorithm for time-dependent arterial travel time estimation using the archived traffic data. The data collection system simultaneously collects high-resolution “event-based” traffic data including every vehicle actuations over loop detector and every signal phase changes from multiple intersections. Using the “event-based” data, we estimate time-dependent travel time along an arterial by tracing a virtual probe vehicle. At each time step, the virtual probe has three possible maneuvers: acceleration, deceleration and no-speed-change. The maneuver decision is determined by its own status and surrounding traffic conditions, which can be estimated based on the availability of traffic data at intersections. An interesting property of the proposed model is that travel time estimation errors can be self-corrected, because the trajectory differences between a virtual probe vehicle and a real one can be reduced when both vehicles meet a red signal phase and/or a vehicle queue. Field studies at a 11-intersection arterial corridor along France Avenue in Minneapolis, MN, demonstrate that the proposed model can generate accurate time-dependent travel times under various traffic conditions.