In this paper, we analyze the feasibility of using urea for onboard hydrogen production to improve the efficiency of vehicles. Here, hydrogen is used as an additive to the primary fuel (gasoline, diesel). Urea is generally obtained in large quantities by combining ammonia with carbon dioxide in industry. The reverse reaction of decomposing urea into ammonia and carbon dioxide is widely known and currently used for production of ammonia in diesel vehicles where it serves as a NOx reduction agent. In the present system, the vehicle is equipped with a tubular urea tank as placed in the vicinity of the exhaust pipes. The heat recovered from the exhaust gases is used for catalytic conversion of urea into ammonia. The resultant ammonia is further flown over a catalytic membrane where hydrogen is separated from nitrogen. The highly pure hydrogen is then mixed with the fuel and combusted in the engine. We also study how engine efficiency, specific shaft work, specific fuel consumption and costs are affected by this process. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.