Nowadays the increasing demand for sustainable mobility has fostered the introduction of innovative propulsion systems also in the public transport sector in order to achieve a significant reduction of pollutant emissions in highly congested urban areas. This paper describes both the design and the optimization of an environmentally friendly hybrid bus (hereafter referred to as “HYBUS”) for urban public transportation. After a preliminary description of the main features of the hybrid architecture, this paper assessed, through numerical simulations, the fuel economy potential of the hybridization in real world driving conditions. The promising results of this first part of the study led to the development of a first prototype. The first prototype of the bus was built by integrating an innovative hybrid propulsion system featuring a plug-in series architecture into the chassis of an old IVECO 490 TURBOCITY. The bus is 12m long and capable to host up to 116 passengers in the original layout. The project relied on a modular approach where the powertrain could be easily customized for size and power, depending on the specific application. The prototype was then extensively tested in the city of Genoa, Italy, an urban context extremely challenging for a hybrid powertrain due to its frequent uphill routes and significant road grades. The outcomes of the test campaign confirmed the simulations forecasts, and fostered additional analysis aimed to optimize the energy management strategy of the hybrid powertrain. Numerical simulations were then used in order to identify more refined energy management strategies capable of further enhancing the fuel economy potential of the hybrid architecture. Consequently, a novel energy management was developed, and virtually tested, to manage the HYBUS in a more effective way. The results demonstrated the interesting potential of such hybrid architecture.