Variable message sign (VMS), as an infrastructure of the urban traffic guidance system, is a main platform to release guidance information. Improper installation of VMS is incapable of information releasing, which has a negative effect on the performance of the urban traffic guidance system and traffic safety. Aiming at VMS design and location problem with urban traffic environment, the process of reading traffic sign was analyzed. With the consideration of VMS reading time and city traffic environment, the VMS installation model was built for calculating the VMS frontal distance and the height of characters in VMS. The amount of information model was constructed for evaluating the complexity of VMS and its reading time. In order to ensure that the driver has enough distance to react after accepting the information from the VMS, the queue length and no change lanes zone were also considered in the VMS installation model. In addition, the evaluation method for existing VMS and the recommended frontal distance and the height of characters were given.