The performance of the Adaptive RED scheme is susceptible to bursty web traffic. In this paper a parallel virtual queue structure is proposed for active queue management at the bottleneck router. Real time connections such as web and UDP, and non-real time connections such as FTP are served in two different virtual queues with drop-tail and Adaptive RED policies, respectively. Both queues share the same physical buffer memory. Simulation shows that file delivery for the web traffic is greatly improved due to shorter packet delay and lower packet loss rate, and that the queue length variation for the FTP traffic is small. To improve the goodput of the non-real time connections, a modified Adaptive RED scheme with dynamic queue length thresholds is also proposed. This scheme is able to keep the packet dropping probability within a desired small region. Stability of the queue length under this scheme is studied through analysis and numerical computation.