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This thesis (1) reports the development of simulation tools and control strategies for optimizing hybrid electric vehicle (HEV) energy management, and (2) reports the design and testing of a hydraulic hybrid school bus (HHB) prototype. A hybrid vehicle is one that combines two or more energy sources for use in vehicle propulsion. Hybrid electric vehicles have become popular in the consumer market due to their greatly improved fuel economy over conventional vehicles. The control strategy of an HEV has a paramount effect on its fuel economy performance. In this thesis, backward-looking and forward-looking simulations of three HEV architectures (parallel, power-split and 2-mode power-split) are developed. The Equivalent Cost Minimization Strategy (ECMS), which weights electrical power as an equivalent fuel usage, is then studied in great detail and improvements are suggested. Specifically, the robustness of an ECMS controller is improved by linking the equivalence factor to dynamic programming and then further tailoring its functional form. High-fidelity vehicle simulations over multiple drive-cycles are performed to measure the improved performance of the new ECMS controller, and to show its potential for online application. While HEVs are prominent in the consumer market and studied extensively in current literature, hydraulic hybrid vehicles (HHVs) only exist as heavy utility vehicle prototypes. The second half of this thesis reports design, construction, and testing of a hydraulic hybrid school bus prototype. Design considerations, simulation results, and preliminary testing results are reported, which indicate the strong potential for hydraulic hybrids to improve fuel economy in the school bus vehicle segment.