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1999-2007 Chevy Silverado 2500 HD Transfer Case Specs, Problems, and Upgrades

Chevys and GMs built around 1999-2007 feature the FMT 800. This full-size truck platform includes the models Chevrolet Silverado, GMC Sierra, Chevy Tahoe, GMC Yukon, and Chevy Suburban.

In the 263 and the 263 HD, the transfer case has an embedded weak point. It is necessary to repair it before a failure occurs.

The transfer case is used to transfer power in a four-wheel-drive vehicle. Depending on whether you are in 4-wheel drive or 2-wheel drive, it directs power to the rear or front wheels.

It splits the torque generated by the transmission. It does this by providing power to both differentials, the rear, and the front.

This moving action requires mechanical parts to engage it. Normally, it uses two gear ratios and a chain drive. This provides more power options. In contrast, older transfer cases were operated by gears, with only one gear ratio. 

Pump and Fluid Issues

This also requires fluid inside of the case to help maintain lubrication and also to dissipate heat. With this fluid, the case also needs a pump to help the fluid circulate while it is operating. This fluid is either an automatic transmission fluid or the Auto-Trak II fluid. There is an issue because there is no dipstick on the transfer case. So, while both fluid types may degrade, there is no way to check the condition and fluid level. This requires owners to remove the drain plug to see the fluid inside the case.

Design Problems

Another issue is in the physical design of the pump itself. The pump is held in place with ears that support it inside of the pump. However, over time these ears will wear down.

Also, the case is made out of magnesium. This combination of factors causes the cover of the pump to wear into the pump, and can actually cause a hole.

Additionally, the hole for the pump sits about the drain plug’s level. This means that your Silverado won’t leak when it’s parked, but it may leak while driving, which would cause a visible wet spot. The loss of fluid may cause overheating and even potential damage to the transmission.

After this occurs, there is not a lot to be done other than replacement and a rebuild. This applies to the NP263, NP263HD, NP263XHD, and the NV263

Preventing This From Occurring

In order to prevent this issue, you can take a few simple steps. The best solution is to get a case saver. Auto mechanics will be able to install this into the body of the case. It works to prevent a hole from occurring in the first place.

In addition, you should also change the fluid regularly. This will help to keep the internal parts clean and lubricated properly. You should consult your mechanic or owner’s manual for more information about how often to change the fluid in your particular vehicle.


The Chevy Silverado 2500 HD with the NP263HD transfer case can be upgrade. Furthermore, some people just choose to replace their transfer case with an already rebuilt replacement, https://reman-transmission.com/transfer-cases-code/NP263-NV263.

There are a few companies that offer an aftermarket upgrade. The most popular is the Mag-Hytec differential cover. This will protect your investment and give you some extra peace of mind.

In addition, there are also other upgrades available such as:

– Transfer case skid plate

– Transmission cooler

– Dual battery tray

– Differential cover

– Transfer case cross member

– Transmission pan

These are just a few of the most popular upgrades. You can find more information about them online or from your local Chevy Silverado dealer. With these upgrades, you can be sure that your truck is ready for anything. Whether you are looking to protect your investment or just want some extra peace of mind, these upgrades are a great way to do it.