Road automated driving as a new generation of information technology and the integration of the transport industry’s development has become a new round of global scientific and technological innovation and industrial transformation. This technology will promote the continuous upgrading of the field of road traffic. At present, the government, enterprises, and investors all take this as the goal and direction to accelerate automated driving in China. A reasonable traffic law and regulation system is required to promote the healthy development of automatic driving and fully release scientific and technological innovation subjects’ vitality. Until now, China has formulated an official rule concerning the road testing of automated driving. According to this rule, no passenger and freight transportation can be officially applied using automatic vehicles. Therefore, this paper tries to construct the traffic law and regulation framework to promote automated driving development. This paper firstly summarizes the profound reform of automated driving on the road traffic industry in terms of vehicles, infrastructure, practitioners, and transportation services. Based on China’s current administrative rules and traffic regulations, the legal and institutional obstacles in automatic driving are analyzed. This paper proposes a traffic law and regulation framework to promote the development of automated driving. The proposed framework can help the transport authority administrate automated driving in legal identity, demonstration application, transportation operation, practitioner management, and scene management. Finally, the policy suggestions to help develop automated driving are put forward. Through enhanced supervision, mutual recognition of qualification, regulation mode innovation, ecosystem construction, and multi-party cooperation, the automated driving market and partners’ vitality can be significantly stimulated.