This thesis describes the design, simulation and manufacturing of the auxiliary power unit of hybrid electric bus O457 project. Accessory loads are loads which supply the accessory demands such as lubrication, cooling, etc. These loads exist in all conditions even when the vehicle is stopped. These loads become more critical in heavy vehicles due to more accessory demands such as air compressor. In hybrid vehicles where the internal combustion engine ICE is off in some parts of the route, it is required that the accessory loads are supplied by a separate power generator. There is an independent power source in the auxiliary power unit which provides the needed power for the accessory loads. Using an APU is one of the most common solutions for this problem. Accessory loads each unit of hybrid electric bus O457 are analyzed and tested for different drive conditions. These tests are repeated five times in order to get a more precise estimate of the accessory loads of the bus. These units include air compressor, oil pump, water pump and power steering. An auxiliary power unit is designed and optimized to be used in this hybrid electric bus. The effort was made to design a modular unit usable for other hybrid electric buses. In this unit, 11 kW electric motor use as the power generator and accessories parts are connected to the motor with a v-ribbed belt. The chassis for this unit is made of Al 6063 in a standard size. All connections are bolted type. The design criteria were to use minimum space and have minimum weight. In conjunction with design process, necessary simulation of designed elements has been conducted. Afterward the entire system is simulated in MATLAB-SIMULINK based software and the effect of different arrangements in fuel consumption is evaluated. All of the accessories parts are modeled in this software. Air compressor and power steering are simulated as the variable loads. This loads switch between the full loaded and idle state. Oil pump and water pump are modeled as the constant loads because these pumps are positive displacement and the pressure drop in the routes are constant. The complete model is arranged as a subsystem named auxiliary power unit. This subsystem added to the main model of the hybrid electric bus. The simulation is done for both of conventional and hybrid electric bus. The results of three models of hybrid electric bus are compared with the conventional bus. In the first hybrid electric bus model, the accessories are connected to the internal combustion engine and the engine is always on. In the second hybrid electric bus model, the accessories are connected to an electric motor. Finally, in the last hybrid electric bus model, the accessories are connected separately to the several electric motors. The simulation results indicate that hybrid electric bus O457 with Auxiliary power unit second model, lead to 46% decreases in fuel usage and also declines in pollutants like 75% NO x and 75% HC and 38% CO in comparison to the conventional one. Key Words: access ories load, auxiliary power unit (APU), hybrid electric bus, fuel consumption, emissions.