The application of switched mode control to hydraulic systems has the potential of decreasing component complexity, size, and cost. This is accomplished by enabling variable pump or motor functionality using a single on/off valve paired with a compact, inexpensive fixed displacement machine. A 4-way tandem rotary on/off valve is presented in this paper that extends a novel rotary valve concept (experimentally validated for pump applications) to hydraulic pump/motors. The pump/valve system is referred to as a Virtually Variable Displacement Pump/Motor (VVDPM) since the effective displacement of the system is variable and not the physical displacement of the pump itself. This paper investigates the design and efficiency of the proposed rotary valve when utilizing the VVDPM on a light weight power-split hydraulic hybrid passenger vehicle that is driven over a standard federal drive cycle. Simulated VVDPM efficiency maps are presented for motoring and pumping and the cycle efficiency of an optimized VVDPM is compared to that of a typical bent axis unit. Vehicle fuel economy is also explored through simulation.