In this paper, a powertrain control strategy for the real-time energy optimization of a hybrid electric vehicle (HEV) with planetary gear system is presented. Based on the deduced actual powertrain dynamics, the aim is to develop a short-term energy economy optimization strategy to fit the frequent transient operations of the HEV. The effort is paid to design a controller that is not the high-level control for long-term optimization with constraint of the battery state of charge (SoC). Taking the real-time driver demand as constraint, a hierarchical control scheme that guarantees the asymptotic tracking for the references of the powertrain status in terms of vehicle speed and engine speed is proposed by using the framework of Lyapunov stability theory. Under this precondition, an optimal torque distribution solution that minimizes the instantaneous energy consumption defined as the total cost on both of the fuel and electricity is found. The performance of the control system is validated by closed-loop simulations with a full-scale prototype HEV simulator. The results demonstrate the potential of the proposed strategy in terms of energy economy and in tracking the references of the powertrain status.