The National Safety Council (1994) estimated that 1100 agricultural work-related deaths and 130000 disabling injuries occurred in 1993. Among all the cases, tractors were most responsible. Four percent of 1993 tractor-related fatalities were caused by entanglement in PTO stubs (power take-off) or drivelines (National Safety Council, 1994). The PTO-related non-fatalities frequently resulted in extremely serious injuries. Most PTO-related accidents were caused by an engaged but unguarded PTO stub or driveshaft catching on clothing. Clearly, the potential hazard points of a PTO are the exposed high speed rotating components (Murphy, 1992). Using a fluid power drive in place of a mechanical PTO has received considerable interest in recent years, with the motivation of improving PTO safety. Fluid power has not been adopted primarily due its inefficiency. To improve both power source and transmission efficiency, a control strategy for optimizing tractor engine performance by controlling engine speed and fluid power displacements is proposed. A mathematical steady-state model was developed to evaluate the fuel efficiency of the proposed system. Simulation shows that operating an engine at its optimal state can yield a 7 % improvement in average SFC (specific fuel consumption) for the simulated engine. However, due to the low efficiency of the fluid power drive, the optimally controlled engine with a fluid drive would consume an average of 35.6 % more fuel that with a mechanical drive. Further study shows that for the assumed load cycle such an engine coupled with an 88.8 % efficient fluid power drive would consume a similar amount of fuel as the same engine with a 95 % efficient mechanical drive.