Hybrid electric vehicles (HEV's) offer additional flexibility to enhance the fuel economy and emissions of vehicles. The Real-Time Control Strategy (RTCS) presented here optimizes efficiency and emissions of a parallel configuration HEV. In order to determine the ideal operating point of the vehicle's engine and motor, the control strategy considers all possible engine-motor torque pairs. For a given operating point, the strategy predicts the possible energy consumption and the emissions emitted by the vehicle. The strategy calculates the “replacement energy” that would restore the battery's state of charge (SOC) to its initial level. This replacement energy accounts for inefficiencies in the energy storage system conversion process. User- and standards-based weightings of time-averaged fuel economy and emissions performance determine an overall impact function. The strategy continuously selects the operating point that is the minimum of this cost function. Previous control strategies employed a set of static parameters optimized for a particular drive cycle, and they showed little sensitivity to subtle emissions tradeoffs. This new control strategy adjusts its behavior based on the current driving conditions. Simulation results of the RTCS and of a static control strategy on a PNGV-type baseline parallel HEV (42 kW engine and a 32 kW motor) using ADVISOR are presented. Comparison of the simulations demonstrates the flexibility and advantages of the RTCS. Compared to an optimized static control strategy, the RTCS reduced NOx emissions by 23% and PM emissions by 13% at a sacrifice of only 1.4% in fuel economy.