A new three-pulley CVT (Continuously Variable Transmission) with a tensioner has been developed using dry hybrid V-belts. It can transmit higher torque than conventional two-pulley CVT without a tensioner, because the tensioner increases not only a lap angle where power is transmitting but also it can always keep the belt tension optimum. This study shows whether the Euler’s power transmitting theory is applicable to the tensioner type CVT to characterize the CVT operation for preliminary design. The tensioner type CVT has also high shifting speed and it does not need large thrusts on both driving and driven pulleys during shifting since the minimum tension for torque transfer is assured in the slack-side string. The FEM analysis revealed the shifting mechanism and showed that the transmitting force distribution in the pulley groove for the newly developed CVT is almost the same as that for the conventional CVT.