The number of people dying on UK roads fell to 3,221 last year - the lowest since records began in 1926.
The figures are 8% lower than 2003, when the number of highway deaths rose slightly compared to the year before.
It comes four years after the government set a target to cut the 1994-1998 road deaths average by 40%.
Road Safety Minister Stephen Ladyman said the figures were encouraging, but nearly nine people a day still died on roads last year, which was "too high".
"Britain has one of the best road safety records in the world and the government is committed to improving it further," he said.
ON THE ROAD
Last year there were 280,849 road casualties - a drop of 3%;
Road traffic levels in 2004 were 2% higher than 2003;
In 2004, 166 children were killed - 3% fewer than 2003;
134 pedal cyclists were killed - a rise of 18%;
The number of seriously injured fell 7% to 14,473.
"The government will continue to highlight the importance of road safety and to remind all road users of their responsibilities to themselves and others."
By 2010, the government also hopes to cut the number of child deaths by 50% of the 1994 to 1998 average figure and reduce the slight casualty rate by 10%.
In 2004, the number of children killed or seriously injured was 43% below this figure, and provisional estimates suggest the slight casualty rate was 20% below the average.
Road safety charity Brake welcomed the Department for Transport figures, but voiced fears over a "shocking" 18% rise in cyclist deaths.
It blamed a "woeful lack of cycle paths and other facilities for cyclists".
Mary Williams, Brake's chief executive said: "The government is encouraging us to get out of our cars and onto our bikes, and the upshot is that cyclists are dying.
"A cyclist is 20 times more likely to be killed than a car occupant on an urban road, and a shocking 34 times more likely to be killed on a rural road.
"Urgent investment in our road network to make it safe for vulnerable road users is desperately needed to stop these tragedies."