Abstract In this paper, the real-time path searching problem for the larger traffic network is investigated in the developing software—DynaCHINA, and an effective path generation algorithm is proposed. Additionally, a new data structure is provided to store large count of paths and support high performance searching. By the recursive property, the new algorithm can reduce the size of problem which derives the paths with a small space required. As a result, it improves the computing speed greatly in real-time path searching and saves the computer memory resource significantly. Compared with original algorithms, it is found that the proposed algorithm deals with the real-time path searching problem in large traffic network quickly and effectively with a small computer memory. Therefore, the algorithm can be used in practical traffic management.