For a distributed drive electric vehicle (DDEV) driven by four in-wheel motors, advanced vehicle dynamic control methods can be realized easily because motors can be controlled independently, quickly and precisely. And direct yaw-moment control (DYC) has been widely studied and applied to vehicle stability control. Good vehicle handling performance: quick yaw rate transient response, small overshoot, high steady yaw rate gain, etc, is required by drivers under normal conditions, which is less concerned, however. Based on the hierarchical control methodology, a novel control system using direct yaw moment control for improving handling performance of a distributed drive electric vehicle especially under normal driving conditions has been proposed. The upper-loop control system consists of two parts: a state feedback controller, which aims to realize the ideal transient response of yaw rate, with a vehicle sideslip angle observer; and a steering wheel angle feedforward controller designed to achieve a desired yaw rate steady gain. Under the restriction of the effect of poles and zeros in the closed-loop transfer function on the system response and the capacity of in-wheel motors, the integrated time and absolute error (ITAE) function is utilized as the cost function in the optimal control to calculate the ideal eigen frequency and damper coefficient of the system and obtain optimal feedback matrix and feedforward matrix. Simulations and experiments with a DDEV under multiple maneuvers are carried out and show the effectiveness of the proposed method: yaw rate rising time is reduced, steady yaw rate gain is increased, vehicle steering characteristic is close to neutral steer and drivers burdens are also reduced. The control system improves vehicle handling performance under normal conditions in both transient and steady response. State feedback control instead of model following control is introduced in the control system so that the sense of control intervention to drivers is relieved.