An optimized handling stability control strategy is put forward aiming at enhancing a four in-wheel independent-drive motors electric vehicle (4WIDEV) performance capable of handling and stability. The optimized control strategy is designed by a hierarchical control structure, which mainly includes vehicle motion controller and vehicle torque distribution controller. Lateral stability controller, in-vehicle motion controller, which yields the generalized force and generalized yaw moment required of the vehicle, is designed into two modes: an instability control mode and a continuous control mode, which mode is activated determining by stability judgment controller based on phase portraits of sideslip angle and yaw rate. When the vehicle state exceeds the stability envelope region, instability control mode based on envelope control is utilized by sliding mode control method, simultaneously controlling the two-vehicle states variables, whereas continuous control mode is performed with adaptive adjustment of the weight parameter according to pre-defined stability degree. The lateral stability controller with adaptive switching two modes exhibits excellent handling stability performance under normal driving conditions, especially under critical conditions, such as on low tire-road adhesion coefficient. The vehicle torque distribution controller assigns driving or regenerative braking torque to four wheels reasonably and efficiently to satisfy the generalized force and the generalize yaw moment acquired by the vehicle motion controller, which synchronously considers the motor output capability and tire friction ellipse constraints while maintains each wheel slip ratio within the stable range. The results in co-simulation experiments based on Carsim and MATLAB/Simulink verify the proposed control strategy, compared with other control strategies, and demonstrate the effective improvement 4WIDEV’s performance in terms of handling stability especially under critical conditions.