Repairing transfer case leaks (GMT800 / NP246)


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Have recently come to the conclusion that my transfer case has at least one (and possibly up to 3) leaks - when I pull it off the driveway, I can see the accumulation in what looks like 3 spots. Recent 'finger check' shows it to be trans fluid (and I know it's not from the trans). The residue under the truck is on parts back of the tailshaft, further suggesting the xfr case.

While I run in 2wd over 99% of the time, I know I can't just forgo the case and turn the truck into a 2wd. So it has to be present (or I get a new driveshaft).

When I tested it pre-purchase, all modes worked, and it (still) doesn't exhibit any noise (except for a possible clunk under initial acceleration, which I've been attributing to a needed intermediate steering shaft replacement - I'll probably tackle that first, as it's way less time / effort.

Not many choices on my local Craigslist - the few I found are $500 and up. Car-Part looks to be starting at the same and going up from there - quickly (some running $1800 or more). So...I am probably looking at repairing the existing one.

I know it's best to crack the case and put in the preventative to guard against 'pump rub' (or fix it if it already has it). If I'm going that far, I may as well get a full rebuild kit for the thing. A shame for something I use *maybe* two days a year (but might need it while I'm out with the trailer, so I have to bite the bullet on this one.)

Anyone rebuild one of these things and can provide some advice on 'gotchas' ? I know the retaining ring that's accessed through the slot on the tailpiece is considered a b!tch to put in - anything else? Wanting to get this resolved before the snow starts falling, so I need to get started now. Outside of that, I'm not too intimidated by this - just not looking forward to yet more work before I can start using the truck for its intended purpose.

Oh, and do I need a transmission jack to get this R&R'd, or will a regular floor jack suffice? Would rather not spend the $ for a dedicated trans jack, and since I work alone, I'm guessing it wouldn't be smart (or feasible) to R&R without a jack of some type to support it.

For reference - my xfr case RPO is MT1 - has the pushbutton 4x4, and the truck has a 3.73 gear. Should be the same case as a 2500HD, although I can't provide the NP model #, as I haven't run across the tag, yet (I know I'll have to find it before ordering the rebuild kit).


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NP263 but lots of similarities between the two and plenty of tips and tricks to be learned in the series.


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Well...I'm still alive!

(PSA: I made an idiotic move of jacking up the side of the Sierra a bit, to check on the transfer case model, leaks, etc. - and didn't put jack stands underneath before crawling under. Didn't fall or shift, but I realized as I was finishing up that that was a bonehead move. Gotta remember to use those stands, even if 'just looking', and even if the tires are still mostly on the ground). :bonk:

Anyway... what I found...
I don't see any fluid leaks from the TC, anywhere. The only fluid that's on there is on the lower case housing bolts - definitely Dexron (more on this below). Other than that, the entire housing looks dry. Wasn't able to do a deep dive for 'case rub', but I don't see any tell-tale fluid leaks from the top of the tail-end housing.

Also found the model tag, and after wiping off the grease - found out it's a NP246. Good thing I checked, b/c the info I had suggested it would've been a NP263 (actually, a 263HD, and the D-Max gets an exclusive 263XHD, for reference) Car-Part suggested interchange with the 2500, and that *does* use the 263. Oh, well... (maybe it came with a 263, and got a 246 swap in an earlier life?)

So I get back online and check...and apparently, the 246 uses Auto-Trac, *not* Dexron. I'll need to get back underneath when I have the truck parked the opposite way (and jack stands securing!), track down the drain / fill plugs and check out what's in there.

Since I can shift between modes without issue, I'll assume that what's *in* there, is *correct* (but I'll check the service / owner's manuals, as well.)

Don't know whether I should hope to find AT-II vs. Dex VI - if the former, it's definitely the trans where I have a leak. If the latter, then still might be the xfr case at fault (but it would be easier to service than the trans).

Looks like my trans pan is a CCC replacement, and wondering if that's the cause of my leak source - although I'd suspect the gasket over the pan, normally. With the amount of fluid I see after 24hrs of not moving the truck, I'd expect to *see* the fluid dripping, if I waited long enough. Didn't really see any on the garage floor today - maybe it's only a "when warm" (expansion) leak scenario, as I had started the truck from cold yesterday and drove it right into the garage.

Obviously, if I use 'maybe' this many times in a post, I'm a bit unsure as to what's going on. :confused:
And the Bears have scored 17 unanswered on the Pats. Today is officially a wack day :laugh:


I don't think Dex would have damaged the TC or caused a leak. In fact, it is believed that Auto-Trak is tranny fluid coloured blue as another member did a comparison of the two and is using Dex. My TC had something totally different in it (a yellowish power steering looking fluid) but all it had was a leak at the front output shaft.


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Ah - not suggesting the previous owner(s) substituted the wrong fluid, just that what's in there might not be what I was led to believe (the SilvySierra guys said 'Dex', for sure.)

Because of poor engineering, the tail end of the case will form a leak of its own w/o help from anything else (whether it be a 246, a 263, etc.,) as the oscillation of one of the internal components will wear a hold through the top of the tail-end case, if not addressed (apparently worse, the more 4x4 is engaged).

I wouldn't be surprised if AT-II is some sort of Dex-based fluid - it would make sense b/c of the thin consistency, & the detergents in A/T fluid by default. I won't hazard a guess as to lubricity, but a transfer case is much less complex than a typical slushbox - so the requirements should be lessened (it would be nice if it lasted for > 50K change interval, but as long as one remembers...)
Last edited:


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Finally got the truck back in the garage & re-examined the xfr case.

Did a pre-drain level check, and... no fluid visible on the zip tie (put about 4" of it in the case, until I met resistance near the bottom). Not good...

Felt up top for any wetness, evidence of a hole, etc. Couldn't find any. But I couldn't locate the case vent / tube, either.

Pulled the 18mm drain plug (bolt, not recessed), and got about...a pint. Mayyybe 1 1/2. At least I didn't see pieces of the case innards coming out with the fluid (which looks / smells like old Dexron...a bit purplish, but I doubt it's AutoTrac - which is what the '03 owner's manual does call for)

Cleaned off the case bottom with brake cleaner & dried it off. While I was doing that, noticed some deterioration of the seal joining the two case halves together (and the only wetness on the case is in that area, on the bottom.)

Going to put some Permatex ultra black on the outside seam, dump in a couple of quarts of the cheapest Dex I can find, and see if it holds. If not...well, I guess I'll get to R&R the xfr case, either rebuilding or replacing.

(if someone has a better alternative to the Ultra Black, feel free to chime in. I already have the UB, and it's suppose to have 'max oil resistance'). Saw a rebuild on YT where the guy used Permatex 'Great Stuff' for the case bead / gasket, saying it worked best.

While I was under there, took a look at the 4L80's pan. Looks like I'm going to have to bend a heat shield for the one side, and work around the trans mount for 2-3 bolts in the rear. Ugh. And there's fluid from the bellhousing to the rear. Should be fun tracking that leak down. Not.

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