Stricter environmental regulation and the increasing concern about fuel economy and emissions have driven transit agencies and operators toward environmental and economic concerns when selecting transit bus technology. In this scenario, hybrid bus, that combines two or more distinct propulsion systems (generally combustion engine and electric motor), has been seen as a choice that balances both the need for better environmental and efficiency performance and capital expenditures for introducing new technology-based transit bus fleets. The source of better performance of hybrid buses is the ability to i) optimize the operating point of combustion engine to achieve best fuel economy; ii) store energy generated during braking at storage devices (batteries, supercapacitors or flywheels), to be used to power the vehicle when needed, and, hence, iii) downsizing engine due to reduced average power requirements. Most significant gains in efficiency and environmental performance of hybrid vehicles are achieved during starting and stopping regimes, what makes them suitable to be used in congested areas, typical of transit routes. Regarding system design, three main architectures can be used for commercial vehicles: i) serial hybrid, in which combustion engine has no mechanical connection to the driving gear, with the vehicle being driven solely by an electric motor; ii) parallel hybrid, in which the combustion engine and electric motor are both mechanically connected to the wheels, a configuration suitable to less congested regimes, where combustion engine can be tuned to work in its most efficient range; and iii) dual hybrid, in which an engine and two electric motors, with complex planetary gear arrangements, make possible a continuously variable transmission through two parallel routes: electrical and mechanical. This complex design provides freedom in managing engine speed and torque versus vehicle speed and power demand. On a cost perspective, the "Achilles Heel" of hybrid technology, much has to be done, since costs of energy storage devices and electronic components still remain an issue in near and medium term. In transit application, however, since intensive use maximizes hybrid benefits over traditional bus configuration, the expectation is that regulatory measures, like correctly pricing diesel fuel and incentives to hybrid fleets at early market introduction, can make the technology competitive and economically viable. Brazil, one of the largest transit bus markets, is debuting this technology, with some ongoing field trials and an announcement of a hybrid bus fleet in the city of Curitiba, State of Paraná, with an order of 60 local-made hybrid buses for delivery expected from 2012. This study presents the state-of-the-art hybrid bus technologies available worldwide, and, whenever possible, their operational results, with a special focus on Brazilian market, its structure and policies available to make this technology come true.