The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users established the Highway Safety Improvement Program (HSIP), which authorized about $1.3 billion/year from 2006 to 2009 for highway safety projects. The HSIP aims to achieve a significant reduction in fatalities and serious injuries on all public roads, and the number of national traffic fatalities seems to have decreased at about the same time. This study sought to evaluate the effectiveness of the HSIP in reducing fatal crashes in the United States. The study adopted fixed-effect panel models and multilevel mixed-effect models to deal with random fluctuations both before and after introduction of the HSIP and state-specific effects. The results show a drop of about 7.5% in national traffic fatalities since introduction of the HSIP compared with the average for 2001 to 2005, but the magnitude of reduction varied by state. States' safety-related spending did not increase after introduction of the HSIP. Increased federal safety funding was offset by reduced state funding (crowd-out effect). The magnitude of states' fatal-crash reduction was highly associated with years of available crash data, prioritizing method, and use of roadway inventory data. Moreover, states that prioritized hazardous sites by using more detailed roadway inventory data and the empirical Bayes method had the greatest reductions; all of those states relied heavily on the quality of their crash data systems. This study found that effectiveness of the HSIP in reducing national fatal crashes is very likely attributable to mandated reporting requirements, which helped states allocate safety spending more effectively and efficiently. It also suggests that more consistent and reliable crash data will allow states to employ more sophisticated prioritization methods and make better highway safety investment decisions.