This paper presents a detailed investigation of chaotic inflation models with two scalar fields, where one field (the inflaton) rolls while the other is trapped in a false vacuum state. The false vacuum becomes unstable when the inflaton field falls below a critical value, leading to a phase transition to the true vacuum. The paper focuses on the case of false vacuum dominated inflation, particularly the 'Hybrid Inflation' model proposed by Linde, where the false vacuum energy density dominates and signals the end of inflation. It also discusses the first-order case and the production of bubbles in that context. False vacuum dominated inflation is significantly different from the usual true vacuum case in terms of cosmology and particle physics. The spectral index of adiabatic density perturbations can be close to 1 or up to 10% higher. The energy scale at the end of inflation can range from $10^{11}$ GeV to $10^{16}$ GeV. Reheating is prompt, so the reheat temperature cannot be far below $10^{11}$ GeV. Cosmic strings or other topological defects are likely produced at the end of inflation, contributing to large-scale structure formation and the cosmic microwave background anisotropy. From a particle physics perspective, false vacuum inflation is easier to implement in supergravity than true vacuum chaotic inflation. The smallness of the inflaton mass compared to the Hubble parameter poses a challenge for generic supergravity theories. However, this difficulty can be avoided in a class of supergravity models derived from orbifold compactification of superstrings. This opens the possibility of a realistic, superstring-derived theory of inflation. The Peccei-Quinn symmetry is proposed as a possible explanation for the false vacuum. The paper discusses the inflationary dynamics, density perturbations, and the formation of topological defects. It also explores the parameter space of the model, the tilt and gravitational waves generated during inflation, and the second-order phase transition. The results show that false vacuum dominated inflation can produce a spectral index greater than 1, which is different from the usual true vacuum case. The paper concludes that false vacuum dominated inflation is a viable model with significant implications for cosmology and particle physics.This paper presents a detailed investigation of chaotic inflation models with two scalar fields, where one field (the inflaton) rolls while the other is trapped in a false vacuum state. The false vacuum becomes unstable when the inflaton field falls below a critical value, leading to a phase transition to the true vacuum. The paper focuses on the case of false vacuum dominated inflation, particularly the 'Hybrid Inflation' model proposed by Linde, where the false vacuum energy density dominates and signals the end of inflation. It also discusses the first-order case and the production of bubbles in that context. False vacuum dominated inflation is significantly different from the usual true vacuum case in terms of cosmology and particle physics. The spectral index of adiabatic density perturbations can be close to 1 or up to 10% higher. The energy scale at the end of inflation can range from $10^{11}$ GeV to $10^{16}$ GeV. Reheating is prompt, so the reheat temperature cannot be far below $10^{11}$ GeV. Cosmic strings or other topological defects are likely produced at the end of inflation, contributing to large-scale structure formation and the cosmic microwave background anisotropy. From a particle physics perspective, false vacuum inflation is easier to implement in supergravity than true vacuum chaotic inflation. The smallness of the inflaton mass compared to the Hubble parameter poses a challenge for generic supergravity theories. However, this difficulty can be avoided in a class of supergravity models derived from orbifold compactification of superstrings. This opens the possibility of a realistic, superstring-derived theory of inflation. The Peccei-Quinn symmetry is proposed as a possible explanation for the false vacuum. The paper discusses the inflationary dynamics, density perturbations, and the formation of topological defects. It also explores the parameter space of the model, the tilt and gravitational waves generated during inflation, and the second-order phase transition. The results show that false vacuum dominated inflation can produce a spectral index greater than 1, which is different from the usual true vacuum case. The paper concludes that false vacuum dominated inflation is a viable model with significant implications for cosmology and particle physics.