The aim of the study is to identify the major source of power losses in linear hydraulic actuators and to find suitable solutions. A new energy efficient hydraulic system is proposed. The concept of the proposed system is based on overcoming the back pressure in piston front chamber generated by flow restriction of outlet port. This is achieved by increasing the discharged flow rate of oil by adding two new outlet ports to the conventional hydraulic cylinder. Flow through the new outlet ports is controlled by a novel pressure actuated flow control valve. The discharge oil through the new ports is forwarded directly to the oil tank without passing through the directional control valve that controls the flow to the actuator. The conventional and the proposed hydraulic cylinders are simulated in FLUENT. Results show that the proposed four-port actuators give better performance regarding hydraulic resistance, piston speed and energy savings. © 2012 Springer-Verlag.