An interactive cruise control system and method for providing automatic speed control of a vehicle with improved shifting of an automatic transmission. The system and method controls speed of a vehicle equipped with cruise control and minimizes downshifts in an automatic transmission of the vehicle. Vehicle speed is detected and compared with a setpoint speed which is associated with the cruise control system. Transmission gear shifting is determined based on predetermined shift schedule points. Determined transmission gear downshifts are prevented for a kickdown delay period based on vehicle speed loss and the presence of vehicle deceleration. Also provided is an overspeed reduction method for causing a transmission downshift during an overspeed condition with the throttle closed. Further, the system provides hunting prevention between both second gear and third gear as well as between third gear and fourth gear of a four speed automatic transmission.