Almost every settlement in Italy has in its centre a Zona Traffico Limitato (Limited Traffic Zone). Only authorised vehicles are allowed into this area, making it more pleasant and safer for pedestrians. These areas are clearly indicated with the standard European "No vehicles" sign of a red circle with white centre, like an Italian speed limit sign with no numbers. Do not drive past such a sign. Except perhaps in Rome, there is always a way to make a turn and avoid the ZTL.
Note that using a GPS device will not guarantee that you avoid ZTLs, nor will planning a route using Google Maps or ViaMichelin. As you drive into any settlement, be prepared to see a ZTL sign and make a turn.
This excellent collection of signs is at the entrance to the ZTL in Mantova, and illustrates a number of points. Let's look at each sign in turn.
This sign relates to a small off-street parking lot. The white P on blue background is the standard sign indicating that parking is permitted. On the next plate, the parking meter symbol indicates pay parking, the crossed hammers indicate that the rule applies on weekdays (i.e. not Sundays or public holidays), and the figures show the rule applies from 8 am to 1 pm and from 2.30 pm to 8 pm. The tiny print says cars must display a ticket obtained from the parking machine. "Nei limiti tracciati" means "In this area". The parking lot provides the means of avoiding the ZTL. Turn left into the car park, circle around it, then out and back up the street.
This marks the entry to a zone with a speed limit of 30 km/h. 
This is the sign to pay attention to.The top two plates say that this is entry 7 to the Mantova ZTL. Note the "No vehicles" sign on the second plate.
The third plate lists exceptions: authorised vehicles, bicycles, motorised bicycles, and deliveries at any time. Trucks between 06.00 and 10.00 and between 15.00 and 16.30.
The bottom plate warns that access is monitored by a camera, and that disabled people can go through the ZTL by making an advance booking by phone.
On the main photo, note that there is a camera mounted above this sign. This camera notes the number plate of every vehicle going past, and the local police issue tickets to any unauthorised vehicles.
Finally, this sign on the right of the street says that no vehicles of any kind may enter between 06.00 and 14.00 on Thursdays, because of the weekly market. For good measure, here are a few more signs relating to ZTLs.
From Vicenza: an advance direction sign warning that the turn to the right leads to the ZTL. 
Here is one from Besenello with a lot of wording. You may not understand the words, but the "No vehicles" symbol is very clear. Zone a Traffico Limitato – ZTL
Zone a Traffico Limitato (ZTL) is a limited traffic zone inside the city in which an area is restricted to car traffic. The restricted zones are set up to control traffic, reduce environmental pollution and increase security. Rome has one of the largest ZTL zones in Europe, and quite frankly, it can be a little scary for drivers. It’s the area of town you are unable to drive in unless you have a specific permit to enter. If your car does not have the special permit, you risk receiving a large fine.
ZTL zones can be quite confusing to drivers who are not familiar with the system. The active ZTL times and zones vary by day of the week and time of day. The zones are not always clearly marked, and if you’re unfamiliar with what to look for, you may drive right passed a ZTL entry point without noticing. Cameras monitor the ZTL zones and every car that enters into the zone is photographed. The license plate and tags are matched and compared in a database to determine which cars have the special permit allowing access into the ZTL zone.
Active ZTL times in Rome’s City Centre:
6:30 AM – 6:00 PM Monday – Friday
2:00 PM – 6:00 PM Saturday
11:00 PM – 3:00 AM Friday & Saturday
Active ZTL times in Trastevere:
6:30 AM – 10:00 AM Monday – Saturday
11:00 PM – 3:00 AM Friday & Saturday
You may not know you have entered into a ZTL zone until you receive an extra charge on your credit card from the rental car agency or you receive an official notice in the mail. Rental car agencies are required by law to give your name and contact information to authorities when contacted about a driver with a ZTL violation. Most agencies charge a $25.00-$30.00 fee when they have to give your name to the traffic authorities. This will be noted in your rental agreement. For every ZTL violation you have, you will receive another charge on your credit card from the rental agency. For example, if you have two violations, you will receive two separate charges of $30.00 on your credit card, totaling $60.00. The charge from the rental car agency does not cover the fine for the ZTL violation. You will receive a separate notice for that. Fines range from €25 – €125. As you can tell, if you drive through a ZTL zone without proper permission to do so, it could cost you a LOT. If you unknowingly drive through 5 or 6 times, it could cost you a WHOLE LOT!
One thing to note, there are NO restrictions on Sundays. All cars are free to enter and drive through at any time of the day or night on Sundays. Also, motorcycles, mopeds, scooters and bicycles are exempt from ZTL restrictions. They do not require a special permit, and are free to enter and drive through at any time of the day or night any day of the week.
What do you do if your hotel is located within the ZTL zone?
If you are planning to reserve a rental car for your arrival or will be driving into Rome from another city, contact the hotel staff in advance to let them know you will be driving. If the hotel is located within the ZTL zone, you may need for the hotel to request special permission for you to drive through without receiving a fine. Upon arriving to the hotel, the hotel staff will need to send a fax including name, car tag numbers and dates of stay to the traffic authorities (ATAC agency) to make sure all fines are avoided. The information can be faxed to 06.57118259, and hotel staff should be quite familiar with this type of request.
ZTL Maps:
As you can see from the maps below, ZTL zones vary from day to night. The active day zones are covered in yellow, and the active night zones are covered in blue. The ZTL entrances or gateways are noted by the yellow light bulb symbols.
Day ZTL Zones:
Night ZTL Zones:
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