As gasoline prices rise and the green movement grows, more fluid power companies are working to develop hydraulic hybrid drive trains for large trucks to passenger cars and wind turbines. The hydraulic hybrid drive system is more effective and efficient than traditional hybrid systems because the quantum of recuperation energy generated is comparatively very high. Series hydraulic hybrid system specially designed for stop-and-go vehicles captures energy as the vehicle brakes and puts the vehicle in motion, when the vehicle is restarted. Then the engine kicks in, once the energy captured gets depleted. The kinetic energy lost as heat energy during mechanical friction braking is recovered and stored in the hydraulic accumulator as potential energy during hydrostatic regenerative braking. This paper gives an insight in to the dynamic simulation results obtained using LMS AMESim tool and effect of various system parameters like pre-charge pressure and hydraulic pump/motor maximum displacement on system output power. Varying the pre-charge pressure of the accumulator and controlling the hydraulic pump/motor maximum displacement show significant improvement in the system output power. Maximizing the system output power indirectly leads to less fuel consumption and pollution reduction in hybrid vehicles. © 2012 The Korean Society of Mechanical Engineers and Springer-Verlag Berlin Heidelberg.