A hybrid vehicle and method of control include an internal combustion engine and at least one traction motor operated in an automatic mode such that the combined wheel torque is a function of accelerator pedal position and vehicle speed. In a select shift mode, wheel torque is also a function of a virtual gear number. The virtual gear number varies in response to driver activation of shift selectors or automatically in response to changes in vehicle speed. The vehicle transitions into select shift mode in response to driver activation of a downshift selector. When the transition occurs, an initial virtual gear number is selected to ensure that wheel torque increases.