This research concerns the design of a powertrain system for a plug-in parallel diesel hybrid electric bus equipped with a continuously variable transmission (CVT) and presents a new design paradigm for the plug-in hybrid electric bus (HEB). The criteria and method for selecting and sizing powertrain components equipped in the plug-in HEB are presented. The plug-in HEB is designed to overcome the vulnerable limitations of driving range and performance of a purely electric vehicle (EV), and it is also designed to improve the fuel economy and exhaust emissions of conventional buses and conventional HEBs. Optimization of the control strategy for the complicated and interconnected propulsion system in the plug-in parallel HEB is one of the most significant factors for achieving higher fuel economy and lower exhaust emissions in the hybrid electric vehicle (HEV). In this research, the proposed control strategy was simulated to prove its validity using the ADVISOR (advanced vehicle simulator) analysis simulation tool.