This paper presents a heuristic method for designing a PRT network. Because the PRT system operating characteristics and performance measures differ widely from those of conventional transit technologies, an algorithm for the PRT network design problem (NDP) is derived by using concepts from some current NDP algorithms. We minimize the sum of passenger travel time coss construction cost., vehicle cost and operational costs, subject to an available budget of guideway, a maximum number of vehicles and given l i i capacities. Starting with a well-connected initial network, the algorithm eliminates and adds links iteratively as it searches for a near-optimal solution. If this solution satisfies the budget constraint, it is considered to be acceptable. Otherwise, additional links are deleted until a feasible near-optimal solution is obtained. The link elimiation phase of the algorithm only considers half of the links at a time which greatly decreases computing time. None of the links in an acceptable solution will be overloaded.