A drive unit for a hybrid vehicle, comprising: an engine; a first motor having an electric power generating function; a power distribution device that is configured to perform a differential action among an input element to which a torque of the engine is configured to be applied, a reaction element to which a torque of the first motor is configured to be applied, and an output element; an output gear to which a torque is configured to be delivered from the output element; a first clutch that connects an output shaft of the engine to a rotor of the first motor; a second clutch that is configured to allow a torque transmission from the engine to the output gear through the power distribution device; and a second motor that is configured to be driven by electric power generated by the first motor to generate a drive torque to propel the vehicle; wherein the power distribution device, the output gear, the first motor, the first clutch, and the second clutch are arranged coaxially; characterized in that: the output gear is shaped as a cylinder having an inner diameter larger than an outer diameter of the power distribution device; the power distribution device is disposed in an inner circumferential side of the output gear; and at least a portion of the second clutch is disposed in the inner circumferential side of the output gear while being adjacent to the power distribution device in an axial direction. an engine; a first motor having an electric power generating function; a power distribution device that is configured to perform a differential action among an input element to which a torque of the engine is configured to be applied, a reaction element to which a torque of the first motor is configured to be applied, and an output element; an output gear to which a torque is configured to be delivered from the output element; a first clutch that connects an output shaft of the engine to a rotor of the first motor; a second clutch that is configured to allow a torque transmission from the engine to the output gear through the power distribution device; and a second motor that is configured to be driven by electric power generated by the first motor to generate a drive torque to propel the vehicle; wherein the power distribution device, the output gear, the first motor, the first clutch, and the second clutch are arranged coaxially; characterized in that: the output gear is shaped as a cylinder having an inner diameter larger than an outer diameter of the power distribution device; the power distribution device is disposed in an inner circumferential side of the output gear; and at least a portion of the second clutch is disposed in the inner circumferential side of the output gear while being adjacent to the power distribution device in an axial direction. the output gear is shaped as a cylinder having an inner diameter larger than an outer diameter of the power distribution device; the power distribution device is disposed in an inner circumferential side of the output gear; and at least a portion of the second clutch is disposed in the inner circumferential side of the output gear while being adjacent to the power distribution device in an axial direction.