The hydraulic hybrid vehicle(HHV) is an application of hydrostatic transmission technology to improve vehicle fuel economy and emissions. A relatively lower energy density of hydraulic accumulator and complicated coordinating operations between two power sources require a special energy management strategy to maximize the fuel saving potential. This paper presents a new type of configuration for parallel HHV to minimize the disadvantages of the hydraulic accumulator, as well as a methodology for developing an energy management strategy tailored specially for PHHV. Based on an analysis of the optimal energy distribution between two power sources over a representative urban driving cycle with a Dynamic Programming(DP) algorithm, a fuzzy-based optimal torque management strategy is designed and developed to control the torque distribution. Simulation results demonstrates that the optimal torque management strategy maximizes the advantages of this hybrid type of configuration, and the high power density characteristics of hydraulic technology effectively improve the robustness of the energy management strategy and fuel economy of the PHHV.