A method and system for limiting a fast transient in an engine in a hybrid vehicle is provided. The predicted fuel loss percentage is calculated from an inferred air-fuel ratio (inferred lambda). The rate limit term is calculated from a measured air-fuel ratio (measured lambda) and an engine torque command change rate. The predicted fuel loss percentage and the rate limit term are inputs into a calibration table to determine an engine power rate limit and an engine torque rate limit. An engine torque command is limited using the engine torque rate limit to control a fast engine torque transient for an engine. An engine power command is limited using the engine power rate limit to control the fast engine power transient for the engine.