Modern gasoline engines have increased part-load fuel economy and specific power output through technologies such as downsizing, turbocharging, direct injection, and exhaust gas recirculation. These engines tend to have higher sensitivity to driving behavior because of the steady-state efficiency versus output characteristics (e.g., sweet spot at lower output) and the dynamic response characteristics (e.g., turbo lag). It has been observed that the technologies aimed at increased engine efficiency may improve fuel economy for less aggressive cycles and drivers while hurting fuel economy for more aggressive cycles and drivers. The higher degrees of freedom in these engines and the increased sensitivity make controls and calibration more complex and more important at the same time. With the interactions between the dynamic response characteristics of the powertrain and the driver in mind, a dynamic control strategy for variable cam timing (VCT) and exhaust gas recirculation (EGR) is developed. The strategy allows actuator positions at steady-state optimal values when possible yet a fast response proportional to the driver request in transients. The aim is to strike a balance, which is tunable, between steady state efficiency and transient response. Most of the calibration process is algorithmic and based on standard engine mapping data. Experimental results for fuel economy on drive cycles and performance testing from powertrain and chassis dynamometers for two powertrain configurations are reported. Analysis shows improvements in terms of fuel economy and driver demand tracking on drive cycles as well as improved performance metrics. In particular, it is demonstrated that it is possible to simultaneously improve transient performance and fuel economy.