This paper studies the characteristics of fuel consumption and exhaust emission of city transit buses, and analyzes the fuel saving rate and exhaust pollutants reduction effect of LPG-HEV buses relative to LPG buses. The running speed, fuel consumption, exhaust emission and other variables of 3 LPG-HEV buses that aren't plug-in hybrid, and 2 LPG buses were measured by a portable emission measurement system (PEMS) under real driving situations of city transit buses in Guangzhou, China. The test data was analyzed to make a comparison between LPG-HEV and LPG buses. The study results show that the running speed of city buses in real driving modes is mainly distributed in the range of 0 to 35 km/h, and the average value is 18km/h, while the acceleration is distributed in a range from −0.5 to 0.5m/s2 mainly. The average fuel consumption of LPG-HEV buses is 51.02 l/100km, and is 6.23% lower than that of LPG buses. The fuel saving effects appears when its speed below 25 km/h, and the lower the speed is, the more significant the fuel saving effect will be. The average emission factors of exhaust gases NOx, CO and HC of LPG-HEV buses are 21.7g/km, 2.36g/km and 1.61g/km, and has a change ratio of −18.9%, 108.8% and 10.3%respectively by contrast with that of LPG buses. The increase of CO and HC emission factors of LPG-HEV buses is due to the decrease of excess air coefficient in LPG-HEV engine.