Variable Speed Limit (VSL) is a traffic operation method of preventing accidents and improving traffic conditions. The VSL management technique for highway is already being applied and operated in Germany, the UK, and other countries in Europe. But there are few studies about the effect of VSL on traffic flow. This paper aims to study the principle of VSL and the effect of VSL on traffic flow theoretically using the fundamental traffic model and shockwave theory. In this paper, changes in traffic flow state with VSL are explained using the time/distance headway of the vehicle trajectory and are then converted into aggregate data in order to apply the real traffic condition easily. Finally the findings are verified by the numerical method and VISSIM simulation.