An efficient hybrid modulation/demodulation scheme using a short duration pulse in the time-domain for ultra wideband-impulse radio (UWB-IR) systems is proposed. The proposed modulation scheme is pulse position modulation (PPM) of the UWB-IR standard modulation combined with differential encoding, and non-coherent energy detection (ED) adopting differential decoding is proposed for demodulation. Differential encoding makes a pulse that can transfer additive information bit into bits assigned in one symbol without increasing the symbol period. The BER performance is evaluated for 2-PPM, 4-PPM and the proposed HD-2PPM (which has the same symbol duration as BPPM and includes two information bits per symbol). The error performance indicates that the proposed scheme is an outstanding 0.5 dB over existing schemes of UWB-IR, and the data-rate performance shows that the proposed method has higher spectral efficiency than conventional methods that occupy the same duration as the proposed scheme.