ProcessLight: Process Supervision for Large Language Model Based Traffic Signal Control

Large Language Models (LLMs) have recently been introduced into traffic signal control (TSC) as decision agents due to their strengths in human-readable reasoning generation. Yet, existing LLM TSC methods optimize only from final outcomes and fail to distinguish valid from flawed reasoning steps, causing useful or misleading steps to be jointly updated and thus impairing the model's learning of effective reasoning. To bridge this gap, we propose an LLM-based framework ProcessLight to decompose signal decisions into verifiable semantic steps. Building on ProcessLight, we further develop Step-wise Traffic Process Policy Optimization (STeP-PO), a novel reinforcement learning framework that optimizes structured reasoning processes through step-level credit assignment. Specifically, STeP-PO uses step quality scores to evaluate local reasoning quality and step importance to measure each step's influence on the final action, and then assigns step-level advantages over a semantic step tree structure. The resulting step-level advantages are propagated to reasoning tokens, enabling fine-grained policy optimization beyond outcome-only rewards. Extensive experiments over multiple real-world datasets demonstrate the superiority of our methods. Our code is available at https://github.com/wenzhaoabc/processlight.