In the struggle through the process of sustainable development, many industrialising countries have attempted to bridge the gap between economic growth and environmental protection through improving their transportation systems. Malaysia is one such country. This dissertation studied Malaysia’s transportation system in light of its economic growth and sought to determine whether or not this growth is sustainable. Transportation technology development was analysed based upon data relating to Malaysia’s innovation history, education, R&D investment, patents, technical labour force, capital investment, FDI reliance, vehicle use, and air pollution emissions. It was determined that Malaysia’s successful push for a national car industry has correlated with high automobile production rates and corresponding increases in air pollution. Based upon their low educational attainment, low R&D investment, low contribution to patent publishing, low technical labour force, low capital investment, and FDI dependence it was determined that Malaysia lacks the innovative capabilities to improve their automobile technologies so as to improve efficiency and reduce pollution. This dissertation also studied the transportation policy implementation schemes that Malaysia has followed. It is shown that Malaysia’s response to cope with increasing transit needs from rapid urbanisation has not been sufficient to facilitate worker mobility and curb pollution from car use. As a result of this study, it was recommended that Malaysia improve enrolment rates, increase investment in R&D, and follow a transit-oriented development path that holistically considers supply and demand in the transit system.