In this paper, we present the development of P-SURO II hybrid AUV (Autonomous Underwater Vehicle) which can be operated in both of AUV and ROV (Remotely Operated Vehicle) modes. In its AUV mode, the vehicle is supposed to carry out some of underwater missions which are difficult to be achieved in ROV mode due to the tether cable. To accomplish its missions such as inspection and maintenance of complex underwater structures in AUV mode, the vehicle is required to have high level of autonomy including environmental recognition, obstacle avoidance, autonomous navigation, and so on. In addition to its systematic development issues, some of algorithmic issues are also discussed in this paper. Various experimental studies are also presented to demonstrate these developed autonomy algorithms.