This paper describes the design and capabilities of a state-of-the-art diesel engine transient test system, which has been developed and built in the Powertrain Control Research Laboratory (PCRL) at the University of Wisconsin - Madison. The system includes a hydrostatic transient dynamometer capable of approximately 300 Hz actuation bandwidth, which is integrated with a dynamic vehicle drivetrain model that runs in real time. This hardware-in-the-loop (HIL) system simulates dynamic torque loading on the engine while performing an FTP, NEDC, J10.15, or any other drive cycles. The dynamometer system is complemented with transient emissions instrumentation to evaluate the state and composition of engine feed gases, and pre and post catalytic converter gases. Included in this paper are details of the design philosophy, why a hydrostatic design was used, specifics on the hardware of the system, as well as experimental data from the system.