This paper describes the design and development of a prototype parallel hybrid electric two-wheeler vehicle. A unique transmission system is designed, developed and integrated into a two-wheeler with conventional manual transmission system. The vehicle runs on a petrol engine coupled with an electric motor in parallel drive configuration. The vehicle has three basic modes of operation - engine mode, electric mode, hybrid switching mode. Two optional modes are also possible - Regenerative braking mode and Continuous assistance mode. Apart from these, the vehicle has an independent gear box set for the electric motor, meant for three other modes of operation - low speed (high torque), medium speed and high speed operations suitable for high gradient, city and highway conditions respectively when in electric mode. The maximum speed target in electric mode is 25kmph in city drive and 40kmph in highway with a range of 50km per charging in electric mode. The range targeted is 100km for a run in hybrid mode. An 80cc grade gasoline two-wheeler is chosen for the purpose. The vehicle is twelve year old and uses two-stroke cycle. The vehicle is successfully tested to meet the projected target. Throughout the course of the work emphasis is given on safety, simplicity and reliability to the possible extent.