This paper presents an application of a recently proposed methodology for modeling connected and autonomous vehicles (CAVs) in heterogeneous traffic flow, to investigate the impact of setting dedicated lanes for CAVs on traffic flow throughput. A fundamental diagram approach was introduced which reveals the pros and cons of setting dedicated lanes for CAVs under various CAV penetration rates and demand levels. The performance of traffic flow under different number of CAV dedicated lanes is compared with mixed flow situation. Simulation results indicate that at a low CAV penetration rate, setting CAV dedicated lanes deteriorates the performance of the overall traffic flow throughput, particularly under a low density level. When CAVs reach a dominant role in the mixed flow, the merits of setting dedicated lanes also decrease. The benefit of setting CAV dedicated lane can only be obtained within a medium density range. CAV penetration rate and individual CAV performance are significant factors that decide the performance of CAV dedicated lane. The higher level of performance the CAV could achieve, the greater benefit it will attain through the deployment of CAV dedicated lane. Besides, the performance of CAV dedicated lane can be improved through setting a higher speed limit for CAVs on the dedicated lane than vehicles on other normal lanes. This work provides some insights into the impact of the CAV dedicated lane on traffic systems, and helpful in deciding the optimal number of dedicated lanes for CAVs. (C) 2018 Elsevier B.V. All rights reserved.