A hybrid system for powering a vehicle and a method of controlling the hybrid system. The hybrid system has both an internal combustion engine and a motor/generator. The vehicle is controlled in response to the combination of states of five control parameters of the vehicle: polarity of the MG (positive or negative), relative rotor/stator speed, fueling of engine (on or off), clutch (on or off), and transmission shift position (drive, reverse, park). A control unit receives data from the vehicle representing these states, and determines an associated control mode. In at least one of the control modes, the engine both drives the vehicles and provides power to the generator.