The RFID System on Roads (RSR), which includes RFID tags deployed on roads and RFID readers installed on vehicles, is an essential platform for future transportation systems. It can provide unique features that are missing from the current systems, including lane level position, road traffic control information, vehicle distance estimation, real time driving behavior analysis, and so on. Based on these features, several novel vehicular applications can be implemented, which can significantly improve the transportation safety and efficiency. Specifically, the proposed applications on RSR include Assisted Navigation Systems, Electrical Traffic Control, Unmanned Patrol Systems, Vehicle Distance Estimation, Parking Assistant System, Route Tracing and Access Control, Unmanned Ground Vehicles. We also investigate the corresponding engineering/system and research challenges for implementing RSR and its applications in this article.