An innovative hybrid spatial discretization method is proposed to improve the computational efficiency of pin-wise heterogeneous three-dimensional light water reactor (LWR) core neutronics analysis. The newly developed method employs the standard finite difference method in the x and y directions and the well-known nodal methods [nodal expansion method (NEM) and analytic nodal method (ANM) as needed] in the z direction. Four variants of the hybrid method are investigated depending on the axial nodal methodologies: HYBRID A, NEM with the conventional quadratic transverse leakage; HYBRID B, the conventional NEM method except that the transverse-leakage shapes are obtained from a fine-mesh local problem (FMLP) around the control rod tip; HYBRID C, the same as HYBRID B except that ANM with a high-order transverse leakage obtained from the FMLP is used in the vicinity of the control rod tip; and HYBRID D, the same as HYBRID C except that the transverse leakage is determined using the buckling approximation instead of the FMLP around the control rod tip. Benchmark calculations demonstrate that all the hybrid algorithms are consistent and stable and that the HYBRID C method provides the best numerical performance in the case of rodded LWR problems with pin-wise homogenized cross sections.