A system and method for controlling a transmission gear shift during a braking event in a vehicle having an electric motor and friction brakes both operable to brake the vehicle includes the step of reducing friction braking to increase wheel torque during the braking event. The braking event includes both friction braking and regenerative braking. The reduction in friction braking to increase the wheel torque is based at least in part on a reduction in the wheel torque resulting from a change in gear ratio of a step-ratio transmission during the transmission gear shift.