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Due to the rapid development of vehicular transportation and urbanization, traffic congestion has been increasing and becomes a serious problem in almost all major cities worldwide. Many instances of traffic congestion can be traced to their root causes, the so-called traffic bottlenecks, where relief of traffic congestion at bottlenecks can bring network-wide improvement. Therefore, it is important to identify the locations of bottlenecks and very often the most effective way to improve traffic flow and relieve traffic congestion is to improve traffic situations at bottlenecks. In this article, we first propose a novel definition of traffic bottleneck taking into account both the congestion level cost of a road segment itself and the contagion cost that the congestion may propagate to other road segments. Then, an algorithm is presented to identify congested road segments and construct congestion propagation graphs to model congestion propagation in urban road networks. Using the graphs, maximal spanning trees are constructed that allow an easy identification of the causal relationship between congestion at different road segments. Moreover, using Markov analysis to determine the probabilities of congestion propagation from one road segment to another road segment, we can calculate the aforementioned congestion cost and identify bottlenecks in the road network. Finally, simulation studies using SUMO confirm that traffic relief at the bottlenecks identified using the proposed technique can bring more effective network-wide improvement. Furthermore, when considering the impact of congestion propagation, the most congested road segments are not necessarily bottlenecks in the road network. The proposed approach can better capture the features of urban bottlenecks and lead to a more effective way to identify bottlenecks for traffic improvement. Experiments are further conducted using data collected from inductive loop detectors in Taipei road network and some road segments are identified as bottlenecks using the proposed method. [ABSTRACT FROM AUTHOR]