A vehicular drive system is disclosed as including an electrically operated differential portion (16) disposed in a power transmitting path between an engine (8) and drive wheels (38) for controlling an operating state of an electric motor (M), connected to a rotary element of a differential portion (11), for controlling a differential state between an input-shaft rotation speed and an output-shaft rotation speed, and a shifting portion (20) forming a part of the power transmitting path and functioning as a step-variable automatic shifting portion. A control device (40) performs a control of output torque of the electric motor during a downshift of the step-variable shifting portion so as to suppress a variation in the engine rotation speed. The control of output torque is performed so as to increase the output torque by inertia torque of the electric motor, thereby achieving a reduction in shifting shock.