began official operations on July 1, 1973. The new agency was organized into six divisions: Highways, Mass Transportation, Aeronautics, Transportation Planning, Legal, and Administrative Services.

Caltrans went through a difficult period of transformation during the 1970s, as its institutional focus shifted from highway construction to highway maintenance. The agency was forced to contend with declining revenues, increasing construction and maintenance costs (especially the skyrocketing cost of maintaining the vast highway system