Abstract: Vehicular Ad-hoc Networks (VANETs) are highly dynamic network and prone to many kinds of attacks. One class of attacks known as routing misbehavior targets the routing process of the networks. Grayhole attack is a malicious change in the routing process of effected nodes. Such node takes part in routing process but drops the packet when it is required to forward the packet to other nodes. This attack changes the performance of the network. Ad-hoc On-Demand Distance Vector (AODV) is prone to grayhole attack due to lack of central control and security. In this paper, we have proposed a counter based approach for mitigation of grayhole attack using freeway mobility model for highway scenario which is most suited for VANETs. Simulation results and analysis of proposed work has been carried out using NS-2. Further, the performance of the proposed work has been compared in terms of packet delivery ratio, normalized routing load, end to end delay and average throughput with grayhole attack in AODV and normal AODV protocol.