This paper focuses on the dynamic parameters matching and powertrain ratio optimization of an ERCB (Extended Range City Bus) for improving fuel economy. Firstly, according to the bus data and design targets of an ERCB, dynamic parameters are matched. Simulation models of each component that makes up the whole powertrain are established depending on the platform of AVL-CRUISE, including battery, motor, main reducer, wheels, etc. Dynamic performance, such as full load acceleration, climbing performance, maximum speed performance and endurance mileage, is simulated successively using AVL-CRUISE. Also the fuel economy performance under Chinese Urban Driving Cycle (CUDC) is worked out. The simulation results of each performance are analyzed. To improve the fuel economy, the transmission ratio and final ratio are optimized with Isight software. Results before and after optimization are compared, which indicate that the bus’s design of driving system is relatively rational and it has a good dynamic and fuel economy performance.