In View of the performance of high output torque moment, good response and continuously variable transmission of hydrostatic transmission, a new concept of Hydraulic Energy Storage Transmission System (HESTS) of city bus was put forward, although the hydraulic-mechanical split power hybrid city bus had run effectively in some cities, such as Copenhagen, Stockholm and Berlin, etc.. HESTS was comprised of a variable displacement pump, a variable displacement pump/motor unit, two accumulators and an Electrical Control Unit (ECU). The high pressure accumulator could be controlled to absorb braking energy in hydraulic energy and reuse the stored energy to restart the prime mover or accelerate the vehicle. HESTS could operate in seven modes while the ECU outputs different combined control signals to pump, pump/motor and directional valves.The mathematical model of a HESTS for a city bus was established. Computer simulations showed that the efficiency of the HESTS city bus was improved, and there were potentialities to construct a city bus fixed with HESTS. An experimental rig of HESTS was built in the Fluid Power Laboratory of Harbin Institute of Technology. Experiment according to a practical running cycle showed that the HESTS city bus performed the operation demands efficiency.