Both an optimal design of the engine operating strategy and fuel economy prediction technique for a HEV under the vehicle driving condition are very crucial for the development of vehicle fuel economy performance. Thus, in this study, engine operating characteristics of PRIUS III were analyzed with vehicle running conditions and the correlations between vehicle tractive power and fuel consumption were introduced. As a result, fuel economy performance of PRIUS III with various test modes were predicted and verified. Errors of predicted fuel economy were between -5% and -1%.