We present simulated fuel economy and emissions of city transit buses powered by conventional diesel engines and diesel-hybrid electric powertrains of varying size. Six representative city drive cycles were included in the study. In addition, we included previously published aftertreatment device models for control of CO, HC, NOx, and particulate matter (PM) emissions. Our results reveal that bus hybridization can significantly enhance fuel economy by reducing engine idling time, reducing demands for accessory loads, exploiting regenerative braking, and shifting engine operation to speeds and loads with higher fuel efficiency. Increased hybridization also tends to monotonically reduce engine-out emissions, but tailpipe (post-aftertreatment) emissions are affected by complex interactions between engine load and the transient catalyst temperatures, and the emissions results were found to depend significantly on motor size and details of each drive cycle.