Noise pollution has increased substantially with the increase in automobiles over the past one decade, which has put the legislative bodies to implement strict regulations on automotive manufacturers to keep the noise within prescribed limits. In context to that manufacturers and researchers are working hard in redesigning of exhaust system because it contributes significantly to the overall sound of automobile and has great scope for improvement. In this study, two stages are followed in the process of optimizing an existing reactive muffler to a hybrid muffler using pilot experiments and Taguchi based design of experiment methodology. In the first stage, the existing muffler was optimized using the Taguchi’s DOE methodology and the transmission loss was determined for the optimized reactive muffler. In the second stage, a layer of absorptive material was implemented in the optimized reactive muffler in each chamber. Taguchi based DOE methodology was then used for optimizing the thickness of the absorption layer in each chamber. This hybrid muffler was evaluated with simulation and experimentation and compared with the optimized reactive muffler. The results showed a substantial increase in maximum transmission loss from 72.94 dB to 79.34 dB. Further, it was observed that the transmission loss was better in the frequency band of 100 Hz to 900 Hz and beyond 1350 Hz for the hybrid muffler and in rest of the frequency range it was comparable with the optimized reactive muffler. In addition to that, it was observed that the simulation results were having good agreement with the experimental results and can be relied upon for optimization. Thus the hybrid muffler could provide a better solution for reducing the overall sound level of an automobile and to follow the regulations laid by the government.