A hybrid engine and battery generator and a method of operating the same. The generator is controlled to operate in at least three modes: a battery-only mode, a battery charging mode, and a boost mode. In the battery-only mode, the engine is off and an internal battery of the generator is used by an inverter to generate AC output. In the battery charging mode, the engine generates DC power, via an alternator and rectifier, which is used to charge the battery and to supply power to the inverter to generate AC output. In the boost mode, the battery and the engine generate DC power that is used by the inverter to generate an AC output with increased wattage, relative to the battery-only mode and battery charging mode. The generator automatically switches between the modes based on battery level and load demand.