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In the power split type hybrid electric vehicle(HEV), since the two motors are used to assist the engine or to charge the battery, it is essential how to control the two motors while minimizing the fuel consumption and satisfying the driver's demand. In this paper, a control algorithm of a power split type HEV is investigated for optimal engine operation. The control algorithm is designed in such a way that it could control the torques of two motors, MG1 and MG2 to enable the engine to operate on the optimal operation line according to the engine power and battery power that can be determined from the driver's acceleration intention. To verify the performance of the proposed control algorithm, a power split transmission is designed using two planetary gears. It is verified that the engine could be in operation at around the optimal operation line while satisfying the desired battery power limitation, using the MG1 and MG2 torque control algorithm proposed in this study.