An important issue in accelerating the introduction of ATM networks is to offer more convenient access to the customer and a more efficient ATM system architecture. Regarding the first point, ATM network customers are currently inconvenienced by the need to declare traffic parameters, such as peak and average cell rates to the network provider before using the network. However, it is difficult for a customer to predict traffic parameters. This paper proposes a new ATM system with a dynamic bandwidth estimation and allocation scheme. This eliminates the need for traffic parameter declaration, and realizes more convenient ATM service. The proposed ATM system is a ring network. Bandwidth estimation is carried out by the "Network Server" located on the ring network. The estimation is achieved by observing the parameters closely related to media access control (MAC) protocols of LAN/MAN systems. Based on an estimation of customer traffic, the "Network Server" effectively allocates the bandwidth to each customer. This realizes a more efficient ATM network.