To address the engineering challenge of implementing hybrid traction in EMUs under strict under-floor space constraints , this paper proposes a compact hybrid power transmission system based on differential planetary gear transmission, focusing on the development of its core component—the hybrid gearbox. A backward simulation model incorporating a planetary gear set, parallel-axis gear pairs, and electromagnetic clutches was established. Aiming at maximizing overall system efficiency, the optimal operating mode division and power distribution strategies under various speed and acceleration conditions were systematically analyzed. Based on the optimization results, a prototype system consisting of an under-floor hybrid power pack and a roof-mounted battery pack was developed and validated on a dedicated test bench. Simulation and experimental results demonstrate that the proposed hybrid system significantly outperforms conventional diesel traction in dynamic response, fuel economy, and regenerative braking capability, with reduced fuel consumption, balanced battery state of charge, and improved overall efficiency. This study provides a systematic design methodology, energy management strategy, and experimental validation for the hybridization of EMUs under space-constrained conditions.