In this paper, operation algorithms for a parallel HEV equipped with a relatively small motor are investigated. For the HEV, the power assist and the equivalent fuel algorithms are proposed. In the power assist algorithm, an electric motor is used to assist the engine which provides the primary power source. Tn the equivalent fuel algorithm, the electric energy stored in the battery is considered to be an equivalent fuel, and an equivalent brake specific fuel consumption for the electric energy is proposed. From the equivalent fuel algorithm, distribution of the engine power and the motor power is determined to minimize the fuel consumption for a given battery state of charge (SOC) and a required vehicle power. It is found from the simulation results that the fuel economy and the final battery SOC depend on the motor discharge energy and it is the best way to charge the battery only by the regenerative braking, not by the engine to improve the overall fuel efficiency of the HEV with the relatively small motor.