This paper proposes a smart main relay assembly or power relay assembly for xEV battery system. The role of main relay assembly is to connect and disconnect main high voltage battery and loads including the inverter. Current main relay is usually a special electro-mechanical relay which has a gas chamber to suppress electrical sparks between relay contacts for switching high current safely. The gas-chambered electro-mechanical relay is relatively too heavy and bulky to decrease design flexibility and may worsen fuel economy.The proposed smart main relay assembly uses IGBT (insulated gate bipolar transistor) for transient states to switches on or off, and uses relays for steady states to connect or disconnect current. As no spark induces to relay contacts directly with the proposed method, conventional electro-mechanical relays without gas-chambers can be used. Therefore the mass and volume can be reduced to increase gas mileage and also reduce the material cost. Using a current sensor in the assembly, a fail-safe diagnosis function which detects and disconnects an abrupt change of high current up to a given limit, also can be implemented.The prototype of the proposed smart main relay assembly was developed for 80A current load and tested for control and diagnostic functions. The prototype was installed to a hybrid EV and tested including driving conditions. The prototype's fail-safe diagnostic function disconnected high current successfully under the test conditions which include short-circuit to make the previous main relay assembly out of order permanently.