<p>Scientific evaluation of the effects of transportation infrastructure on regional market integration is of great practical significance. Based on the policy context of China’s proposal of National Trunk Highway System (NTHS), the paper examines the effects of large-scale highway construction on regional market integration. To achieve a more accurate evaluation and address endogeneity issues, we adopt “city pairs”, which is more in line with the characteristics of transportation infrastructure connectivity and inter-regional market segmentation, as the unit of study to carry out empirical analyze. The estimations suggest that the decline in inter-city traffic time induced by the development of China’s highway network could effectively alleviate market segmentation between them during 1999 to 2017, but this effect varies for cities with different locations and development. The development of China’s highway network can effectively promote the growth of inter-city product trade and the cross-regional mobility of the labor force, suggesting that the current construction of China’s highways can contribute to domestic market integration through these channels. This study also found that China’s provincial administrative boundaries are an influential factor causing inter-city market segmentation, which is consistent with findings in existing literature, highlighting the need to further enhance governmental reforms and eliminate local protectionist behaviors in order to maximize the role of improved highway networks in promoting regional market integration. This study enriches the research in the field of socioeconomic benefits of highway infrastructure development from the perspective of market integration, and provides solid empirical evidence for developing countries and emerging economies to promote domestic market integration through highway network construction.</p>