A design methodology which uses the regenerative brake model is introduced to determine the major system parameters of a parallel electric hybrid bus drive train. Hybrid system parameters mainly include the power rating of internal combustion engine (ICE), gear ratios of transmission, power rating, and maximal torque of motor, power, and capacity of battery. The regenerative model is built in the vehicle model to estimate the regenerative energy in the real road conditions. The design target is to ensure that the vehicle meets the specified vehicle performance, such as speed and acceleration, and at the same time, operates the ICE within an expected speed range. Several pairs of parameters are selected from the result analysis, and the fuel saving result in the road test shows that a 25% reduction is achieved in fuel consumption.