In this paper, an operation algorithm and a performance simulator are developed for a 42-volt ISG vehiclewhich consists of 5 kW ISG, 2500cc IC engine, torque converter and 4 speed automatic transmission. Modularapproach using MATLAB Simulink is used to construct a dynamic model of the vehicle powertrain which is obtainedfrom each component such as engine, battery, ISG, torque converter, etc.. An operation strategy for a 42-volt ISG vehicle including the function such as engine idle stop and regenerative braking is proposed. Performance simulator is developed based on the dynamic models of the powertrain. It is found from the simulation results that fuel economy can be improved as much as 6 percent for FTP75 driving cycle mostly owing to the engine idle stop.