Increasing the use of renewable biofuels in internal-combustion-engine (ICE) vehicles is a key strategy for reducing greenhouse gas emissions and conserving fossil fuels. Hybrid vehicles used in urban environments significantly reduce fuel consumption compared to conventional internal-combustion-engine cars. In hybrid vehicles integrating electric propulsion with biofuels offers even more significant potential to lower fuel consumption. One would like to think they should also be less polluted in all cases, but some results show that the opposite is true. This study’s aim was to evaluate a hybrid vehicle’s energy and environmental performance using different gasoline–bioethanol blends. A Worldwide Harmonized Light Vehicles Test Cycle (WLTC) study was conducted on a Toyota Prius II hybrid vehicle to assess changes in energy and environmental performance. During the WLTC test, data were collected from the chassis dynamometer, exhaust gas analyser, fuel consumption meter, and engine control unit (ECU). The collected data were synchronised, and calculations were performed to determine the ICE cycle work, brake specific fuel consumption (BSFC), brake thermal efficiency (BTE), pollutant emissions (CO, HC, and NOx), CO2 mass emissions per cycle, and brake specific pollutant emissions per kilometre. The study shows that the performance of the hybrid vehicle’s ICE is strongly influenced by the utilisation of electrical energy stored in the battery, especially at low and medium speeds. As the bioethanol concentration increases, the engine’s ECU advances the ignition timing based on the knock sensor signal. A comprehensive evaluation using the WLTC indicates that increasing the bioethanol concentration up to 70% improves the energy efficiency of the hybrid vehicle’s internal combustion engine and reduces pollutant and CO2 emissions.