This study developed an online suboptimal energy management system by using improved particle swarm optimization (IPSO) for engine/motor hybrid electric vehicles. The vehicle was modeled on the basis of second-order dynamics, and featured five major segments: a battery, a spark ignition engine, a lithium battery, transmission and vehicle dynamics, and a driver model. To manage the power distribution of dual power sources, the IPSO was equipped with three inputs (rotational speed, battery state-of-charge, and demanded torque) and one output (power split ratio). Five steps were developed for IPSO: (1) initialization; (2) determination of the fitness function; (3) selection and memorization; (4) modification of position and velocity; and (5) a stopping rule. Equivalent fuel consumption by the engine and motor was used as the fitness function with five particles, and the IPSO-based vehicle control unit was completed and integrated with the vehicle simulator. To quantify the energy improvement of IPSO, a four-mode rule-based control (system ready, motor only, engine only, and hybrid modes) was designed according to the engine efficiency and rotational speed. A three-loop Equivalent Consumption Minimization Strategy (ECMS) was coded as the best case. The simulation results revealed that IPSO searches the optimal solution more efficiently than conventional PSO does. In two standard driving cycles, ECE and FTP, the improvements in the equivalent fuel consumption and energy consumption compared to baseline were (24.25%, 45.27%) and (31.85%, 56.41%), respectively, for the IPSO. The CO2 emission for all five cases (pure engine, rule-based, PSO, IPSO, ECMS) was compared. These results verify that IPSO performs outstandingly when applied to manage hybrid energy. Hardware-in-the-loop (HIL) implementation and a real vehicle test will be conducted in the near future.