The hybrid method of power system transient stability analysis, which combines the desirable features of both the time-domain simulation technique and the direct method of transient stability analysis, is presented. The hybrid method first computes the actual system trajectory using time-domain simulation, then evaluates the transient energy function in order to derive a stability index for fast derivation of transient stability limits. Proper criteria are proposed to stop the time-domain simulation of the system trajectory to reduce CPU time, once the status of the system has been identified. The method was successfully applied to three test systems varying in size from four generators to 50 generators. The method is shown to be a potential tool for online calculation of transient stability limits. >