Situation awareness (SA) is crucial for safe driving. It is all about perception, comprehension of current situations and projection of the future status. It is demanding for drivers to constantly maintain SA by checking for potential hazards while performing the primary driving tasks. As vehicles in the future will be equipped with more sensors, it is likely that an SA aiding system will present complex situational information to drivers. Although drivers have difficulty to process a variety of complex situational information due to limited cognitive capabilities and perceive the information differently depending upon their cognitive states, the well-known SA design principles by Endsley only provide general guidelines. The principles lack detailed guidelines for dealing with limited human cognitive capabilities. Cognitive capability is a mental capability including planning, complex idea comprehension, and learning from experience. A cognitive state can be regarded as a condition of being (e.g., the state of being aware of the situation). In this paper, we investigate the key cognitive attributes related to SA in driving contexts (i.e., attention focus, mental model, workload, and memory). Endsley proposed that those key cognitive attributes are the main factors that influence SA. In those with higher levels of attributes, we found eight cognitive states which mainly influence a human driver in achieving SA. These are the focused attention state, inattentional blindness state, unfamiliar situation state, familiar situation state, insufficient mental resource state, sufficient mental resource state, high time pressure state, and low time pressure state. We then propose cognitive state aware SA design guidelines that can help designers to effectively convey situation information to drivers. As a case study, we demonstrated the usefulness of our cognitive state aware SA design guidelines by conducting controlled experiments where an existing SA interface is compared with a new SA interface designed following the key guidelines. We used the Situation Awareness Global Assessment Technique (SAGAT) and Decision-Making Questionnaire (DMQ) to measure the SA and decision-making style scores, respectively. Our results show that the new guidelines allowed participants to achieve significantly higher SA and exhibit better decision making performance.