The paper describes a process for the design of fuel-efficient diesel engine powertrains for heavy-duty commercial vehicles. A System Engineering approach is described that delivers optimal fuel efficiency by taking into account interactions among engine, exhaust aftertreatment, and vehicle systems. The primary objective of this approach is to develop a properly integrated system that delivers the lowest total cost of ownership (TCO) while maintaining high sociability, reliability, and performance. The paper will also discuss the role of competitive analysis and benchmarking, in-use duty-cycle analysis, design, simulation and final confirmation tests. System optimization is performed at critical steps in the process for engine hardware, control software and calibration, aftertreatment, engine accessories, powertrain components and vehicle interfaces.The paper provides real world examples to illustrate the trade-offs between the critical elements of the system for optimum fuel efficiency, and performance. Fuel economy test procedures and equipment best practices are also discussed in terms of measurement system accuracy (MSA). This paper intends to address a broad range of vehicle types - including: line-haul, vocational, bus and other applications. It also covers various powertrain configurations including manual, automated manual, and fully automatic transmissions.