The development of transportation technology leads to the increasing of private vehicle uses. The increasing vehicle users causes congestion on each segment of roads and intersections which is one of them located at Pakualaman intersection of Yogyakarta city. The aims of this research are to reveal the condition existing, to analyze the cost of congestion, and to offer alternative solution to improve the intersection performance and to reduce the cost of congestion. The method used to analyze the performance of intersection is using Vissim 10 software to determine the value of delay, level of service and the cost of congestion. The results obtained for the existing condition is an average delay of 96,41 seconds/vehicle, the average of queue length is 59,69 meters, and the level of service is F (very bad). In addition ,the congestion cost during the existing condition is Rp. 2.835.134, - / hour. The alternative solutions provided to improve the performance of intersections and to reduce the cost of congestion are: 1) Adding lane for turn left road continue on the north and south arms of the road, and 2) Widening the road segments and adding lane for turn left road continue on north and south arms. The best result of solution is alternative 2 with an average delay of 85,75 seconds / vehicle, the average of queue length is 29,28 meters, and the level of service is F (very bad) with congestion costs of Rp.2.317.400, - / hour