A method of controlling coasting operation of a hybrid vehicle during a coasting operation and an apparatus for performing the same are provided. The coasting operation is controlled by calculating a remaining distance from a current location of a vehicle and a location at a target vehicle speed and an approach distance until reaching the target vehicle speed demanded at a current vehicle speed. Additionally, an inertia torque is adjusted to correspond to vehicle variation based on roads, slopes of the roads, and exterior disturbances. Thus, since inertia torque is adjusted during the coasting operation based on the target vehicle speed, unnecessary energy loss is reduced and fuel ratio is enhanced during traveling on roads.