EVT (electro-mechanical variable transmission) combines its power sources (engine and motor-generator) in a highly efficient way using planetary gear sets. Power characteristic of the EVT is analyzed by network analysis. From the network analysis, it is found that the EVT should be operated in low to medium speed range due to the power circulation in high speed range, which causes the decreased system efficiency. A motor-generator control algorithm is presented using the control parameters such as ZEV (zero emission vehicle) to HEV (hybrid electric vehicle) mode change velocity, accelerator pedal opening and battery SOC. Based on the dynamic model of the EVT HEV powertrain, a dynamic performance simulator is developed using Cruise. Simulation results show that the control algorithm is able to provide the optimal engine operation for the best fuel economy of the HEV