Hydraulic system plays an important role in many power systems such as excavator, braking system of vehicle and machine tool. Generally speaking, hydraulic control system can be divided into two different driving concepts. The first one is the well-known valve- ontrolled system and the second one is the pump-controlled system. The former possesses the feature of fast dynamic response. However, the poor energy-saving performance is its major fault. On the contrary, the pump-controlled system has the significant advantage of energy-saving which meets the current demand in modern machine design, but has the disadvantage of slower dynamic response. With the advancement of electric- otor system, however, this disadvantage has been greatly improved. In this paper, the simulation analysis using DSHplus for a newly developed energy-saving hydraulic CNC lathe turret is conducted. Instead of the conventional fixed displacement hydraulic pump, the new energy-saving system utilizes a vane pump with AC servo motor as its driving power source. In addition, closed-loop control schemes using PID control is adopted. From simulation results, the new energy- aving design can reduce the waste of the output flow-rate of the pump through the relief valve that generally happens in conventional hydraulic lathe and then achieve the purpose of designing an energy-saving hydraulic lathe.