The hydrothermal scheduling in the electric power market becomes difficult because of introducing competition and considering sorts of constraints. An augmented Lagrangian approach is adopted to solve the problem, which adds to the standard Lagrangian function a quadratic penalty term without changing its dual property, and reduces the oscillation in iterations. According to the theory of large system coordination and decomposition, the problem is divided into hydro sub-problem and thermal sub-problem, which are coordinated by updating the Lagrangian multipliers, then the optimal solution is obtained. Our results for a test system show that the augmented Lagrangian approach can make the problem converge into the optimal solution quickly.