Regenerative braking in hybrid electric vehicles is an essential feature to achieve the maximum fuel economy benefit of hybridization. In response to the driver’s brake pedal application, the feature provides braking by operating the motor in the powertrain as a generator that converts the vehicle’s kinetic energy, otherwise lost to heat as in conventional vehicles, to electrical energy for charging the battery. The primary goal of regenerative braking controls is to maximize kinematic energy recuperation while achieving transparent and consistent braking performance to the driver’s brake request. The P2 type parallel hybrid vehicles refer to hybrid electric vehicles with an electric motor integrated in between an engine with a disconnect clutch and a step ratio transmission with a torque converter. Compared to power split hybrids, the P2 configuration introduces challenges for regenerative braking controls due to the torque converter and step ratio transmission. Such challenges include, but are not limited to, the torque converter clutch capacity controls, shift scheduling and controls, and the coordination between regenerative braking and friction brakes pertinent to the controls. This paper first presents the key challenges encountered during regenerative braking controls development for P2 hybrid vehicles. Design considerations to address each of the challenges are then described. Finally, experimental results are presented to demonstrate the performance of the regenerative braking controls.