Traction Control System (TRCS) has become a standard feature for most of the vehicles due to safety considerations. The system provides better drivability and acceleration performance on low friction surfaces.The TRCS typically tries to maintain slip value to an optimum value to maximize traction force by modifying engine torque and/or brake force intervention. However the optimum slip value is not a constant value and varies depending upon the road surface and tyre conditions. It is challenging task to predict this value dynamically and adapt TRCS under all driving situation.This paper presents an adaptive traction control system which tries to operate at optimum slip point irrespective of prior knowledge of road condition. The system continuously monitors vehicle dynamics parameters and corrects itself to maximize available traction. The controller has been developed using Matlab Simulink platform. The system performance is validated in simulation (MIL technique) using a vehicle platform. The vehicle acceleration and slip control results with TRCS and without TRCS for a typical passenger car are presented.