Abstract: The optimial fare structure for public transport networks with elastic demand is discussed with the assumption of fixed transit service frequency. Because the transit fare structure has significant effects on the passengers' demand and route choice behavior, a bilevel programming method is developed to determine the optimal fare structure for the transit operator with taking into account the passengers' response. The upper-level problem seeks to maximize the operator's revenue, while the lower-level problem is a stochastic user equilibrium transit assignment model with elastic demand. Since the bilevel problem is nonconvex, a heuristic solution algorithm based on sensitivity analysis is proposed. Finally, a numerical example is given to illustrate the proposed model and algorithm.