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This paper describes the initial research and development of a novel parallel hybrid transmission that incorporates design features found in most production 3- and 4-speed automatic transmissions, except that the mechanism can transmit torque from two power sources to the drive wheels. The transmission functions with a heat engine and a single electric motor/ generator, and uses a Simpson gear set and four automatically controlled clutches. Thirteen modes of operation are possible, including one motor-only mode, three power modes, one CVT/charging mode, four engine-only modes, and four regenerative braking modes. Because the design is based on conventional automatic transmission components, the design is simple, compact, relatively efficient, and reliable.