Holistic driving scene understanding is a critical step toward intelligent transportation systems. It involves different levels of analysis, interpretation, reasoning and decision making. In this paper, we propose a 3D dynamic scene analysis framework as the first step toward driving scene understanding. Specifically, given a sequence of synchronized 2D and 3D sensory data, the framework systematically integrates different perception modules to obtain 3D position, orientation, velocity and category of traffic participants and the ego car in a reconstructed 3D semantically labeled traffic scene. We implement this framework and demonstrate the effectiveness in challenging urban driving scenarios. The proposed framework builds a foundation for higher level driving scene understanding problems such as intention and motion prediction of surrounding entities, ego motion planning, and decision making.