Providing reliable real-time travel time information is a critical challenge to all existing traffic routing systems. This study develops a new model for estimating and predicting real-time traffic conditions and travel times for variable message signs-based route guidance system. The proposed model is based on real-time limited detected traffic data, stochastic nonlinear macroscopic traffic flow model, and adaptive Kalman filtering theory. The method has the following main features: (1) real-time estimation and prediction of traffic conditions on a network level using limited traffic detectors, (2) travel time prediction in free flow and congested flow, and (3) prediction of drivers’ en-route diversion behavior. Field testing is conducted based on the Route Guidance Pilot Project sponsored by the National Science and Technology Ministry of China. The achieved testing results are satisfactory and have potential use for future works and field applications.