The paper aims to estimate the corridor capacity of a bus rapid transit (BRT) system by using a revised failure rate approach. The two important factors that influence capacity, which are explored in the present study, are the bus lost time and the failure rate. These factors, along with other factors, were estimated for stops of a selected corridor in the Ahmedabad Bus Rapid Transit System in India. The bus lost time, i.e., the time taken by the first passenger to board the bus, was used to estimate the dwell time and calculated using field data. However, the Transit Capacity and Quality Service Manual provides a default value of the bus lost time for a three- and four-berth stop. But unfortunately, no such value is available for a two-berth stop, and hence, it was estimated using bus stop videography data. Before applying the failure rate approach, it is important to note that, as per literature, two types of capacities are estimated for a transit system, i.e., the operational and maximum capacity. The former is calculated using the field estimated failure rate, whereas the latter is generally assessed using a maximum failure rate of 25% in the case of a conventional stop. Because the present study deals with the exclusive bus system, a maximum failure rate value for a two-berth BRT stop was computed as 29%. The bus stops in the present study were not overtaking stops; hence, the reduction in efficiency of the first birth due to the second berth being occupied was computed as 17%, and this value was estimated using trajectory plots. Based on the proposed methodology, the upstream and downstream capacity of the selected bus corridor was estimated at 136 and $137\mathrm{buses}/h$, respectively.