Combustion-generated aerosols, especially emissions of heavy and light duty vehicles, are the dominant contributors of ambient particulate matter (PM) in urban environments. This paper reviews the atmospheric processes (such as dilution, nucleation, condensation and coagulation) that dominate the dynamics of combustion aerosols following their emission, with a particular emphasis on PM from mobile sources. Atmospheric dilution affects the dynamic behavior of aerosols by shifting the gas-particle partitioning of the semi-volatile component of these aerosols. Our paper discusses the roles of dilution in changing the physico-chemical properties of the ambient aerosols, such as particle size distribution and number concentration, and the degree to which it affects non-labile and semi-volatile PM components. This information is complemented with a discussion of secondary aerosol formation from atmospheric photochemical reactions that involve precursors emitted from traffic sources. Special focus is devoted to the role of gas-phase vapors formed from the evaporation of the semi-volatile fraction of aerosols during dilution. Adding to the common recognition that volatile organic compounds (VOCs) are the major gaseous precursors, these vapors also actively participate in photochemical reactions and contribute to the formation of secondary aerosols. Following this discussion, we review recent findings that link PM semi-volatile components and their redox activity, and we discuss the influence and importance of PM volatility on particle toxicity. Lastly, this paper discusses possible metrics to regulate PM emissions and establish ambient air quality standards that are pertinent to public health, and suggests future investigations aimed to improve our current understanding of the adverse health effects of population exposure to combustion-generated aerosols.