For people on foot, or bicycle, you can use just about any typeface, sans or serif, upper and lower case or all caps. A good designer will make it work, choosing the right weight, size, spacing, leading, colour, layout, etc.

Only cars and the absurd speed at which they travel make “optimum” typefaces a necessity for certain kinds of highway sign.

It’s important to have a bit of local personality, rather than just use a generic utilitarian sans, because these give an impersonal quality to public space, which makes it unloved and unsafe.

It’s all about context. Are you designing for the Library of Congress or for the next SxSW show?

In my opinion, the same principles apply to readability for signage as they do for fine print. The principles are largely the same, but the execution (how they’re implemented) will vary.

I agree with Nick that most typefaces can be used for wayfinding signage, and that as he said it‘s important to avoid arbitrarily using a generic utilitarian sans.

I just would that that altough most typefaces can be used, not all will be appropriate for the specific needs of each project. Some of this factors could be important enough to be accounted in the type selection of a project: the visual and perceptual characteristics of your audience, the environmental noise, visualization distances and conditions, the material and production technique of the signals among others.

I personally find hard to read signs set in sans serif faces with very enclosed counters such as Helvética at certain lenght of distance (bad eyesight), also all caps I find more difficult at the distance.

I have found ITC Garamond as well as other roman faces with lower contrast and large x height to work fine in signage because faces like Times with too much contast tend to get fuzzier from far.

Héctor

Nick has said it already, but I’ll go ahead and put a fine point on it: To be effective, a wayfinding system depends on consistency, sign location, distinctiveness of color, contrast, layout, etc. and on expert spacing of type and other typographic details. The typeface choice will only go so far to bring cohesion; without attention to the arrangement and application of the typeface, it can’t do the whole job. In fact, the usefulness of a typeface can be destroyed or minimized by bad application. Develop a strong system, and you’ll find that almost any typeface can be plugged into it.

If you are lucky, there will be an excellent typeface waiting for you:

http://www.yale.edu/printer/typeface/typeface.html