The availability of natural gas and crude oil resources has been declining over the years. In automobile sector, the consumption of crude oil is 63% of total crude oil production in the world. Hence, automobile industries are placing more emphasis on energy efficient hydraulic hybrid systems, which can replace their conventional transmission systems. Series hydraulic hybrid system (SHHS) is a multidomain mechatronics system with two distinct power sources that includes prime mover and hydropneumatic accumulator. It replaces the conventional transmission system to drive the vehicle. The sizing of the subsystems in SHHS plays a major role in improving the energy efficiency of the vehicle. In this paper, a power bond graph approach is used to model the dynamics of the SHHS. The obtained simulation results indicate the energy flow during various modes of operations. It also includes the dynamic response of hydropneumatic accumulator, prime mover, and system output speed. Further, design optimization of the system is carried out to optimize the process parameters for maximizing the system energy efficiency. This leads to increase in fuel economy and environmentally friendly vehicle. © 2014 R. Ramakrishnan et al.