This paper evaluates the performance measures indicated by the Highway Capacity Manual (HCM) to assess the level of service (LOS) on two-lane highways under heterogeneous traffic conditions. The study is based on field observations and, accordingly, traffic data were collected on a two-lane National Highway in India. The measures, percent time-spent-following (PTSF) and average travel speed (ATS) were estimated using easily collectible field data considering both two-way and directional segments. The actual PTSF values were observed to be lower than the expected values. This lack of conformity is probably because of drivers’ impatience that increases with the platoon length and delay. The ATS was also measured in the field and compared to those obtained using HCM. ATS was observed to be insensitive to flow in mixed traffic situations because of frequent platoon formation. In addition, a direct assessment of LOS in the field indicates over-prediction, which is attributed to the presence of a sizable proportion of slower vehicles based on users’ opinion poll.