Low temperature combustion (LTC) engines are promising to improve the powertrain fuel economy and reduce NOx and soot emissions by improving the in-cylinder combustion process. However, the narrow operating range of the LTC engines limits the use of these engines in conventional powertrains. The engine’s limited operating range can be improved by taking advantage of electrification in the powertrain. In this study, an experimentally developed multi-mode LTC engine is integrated with a parallel hybrid electric powertrain to investigate the fuel economy improvement by maximizing the LTC operating modes. The engine operation modes include homogeneously charged compression ignition (HCCI), reactivity controlled compression ignition (RCCI), and conventional spark ignition (SI). The powertrain controller is designed to enable switching among different modes, with minimum fuel penalty for transient engine operations. In the parallel architecture, a clutch is added to the engine shaft to enable the only electric mode. Moreover, the SI engine’s inefficient operating points are shifted to LTC modes by using the e-motor torque assist. A Pontryagin’s Minimum Principal (PMP) methodology is used in the energy management supervisory controller to study the powertrain energy flow and to select the optimum electrification level. The powertrain efficiency maps are extracted using the experimental hybrid powertrain setup developed at Michigan Technological University. The simulation results for the UDDS driving cycle show that the hybrid electric powertrain with multi-mode LTC engine offers 11% fuel economy improvement over the powertrain with a single-mode SI engine. This improvement increases to 12% in the HWFET driving cycle. The HCCI mode becomes the dominant engine operating mode for high electrification levels; whereas, the SI mode’s contribution increases by reducing the electrification level. The optimization results are used to determine the trade-off among LTC-SI modes and electrification levels to obtain the ultimate fuel saving.