The Merchant Automotive New 263XHD Transfer Case is a brand new replacement for the electronic shift, push-button 4WD transfer case in 2001-2007 Chevy Silverado and GMC Sierra 2500HD and 3500HD trucks with the LB7, LLY and LBZ 6.6 Liter Duramax diesel. It keeps the OE-style magnesium construction and comes with our transfer case pump upgrade already installed, magnetic drain plugs and a 2 quart jug of our performance transfer case fluid. It is backed by a Merchant Automotive 2-Year Unlimited Mileage Warranty.

Electronic shift only. This case is for trucks with the push-button or dash knob 4WD control. If your truck has a manual shift lever on the floor, you need the 261XHD Transfer Case.

Features

• Brand new 263XHD electronic shift transfer case
• OE-style magnesium case with a new magnesium rear housing
• Merchant Automotive transfer case pump upgrade installed to prevent pump rub
• Magnetic drain plug and 304 stainless steel fill plug installed
• Includes a new transfer case to transmission adapter gasket
• Ships with a 2 quart jug of Merchant Automotive Performance Transfer Case Fluid
• Merchant Automotive 2-Year Unlimited Mileage Warranty
• Limited lifetime warranty against pump rub

What's Included

• (1) New 263XHD transfer case with pump upgrade, magnetic drain plug and stainless steel fill plug installed
• (1) Transfer case to transmission adapter gasket
• (1) 2 quart jug of Merchant Automotive Performance Transfer Case Fluid

Not included:

the encoder motor. Reuse the encoder motor from your old transfer case.

Why Our Transfer Case

The GM XHD transfer cases use a gear pump driven off the mainshaft to oil the planetary and the drive sprocket sleeve. The pump is located by four tabs that sit in the rear housing. Over time the pump can wear into the rear housing, which is known as pump rub.

Pump rub can cause a fluid leak and, if not caught, serious damage to the transfer case. Every case we sell has our Transfer Case Pump Upgrade installed to prevent this. Our Magnetic Drain Plug catches small metal debris to help extend fluid life, and the fill plug is made of high strength, corrosion resistant 304 stainless steel.

The included Merchant Automotive Performance Transfer Case Fluid is blended specifically for GM transfer cases.

Pump Rub Warranty

This transfer case comes with a Merchant Automotive Limited Lifetime Warranty against pump rub. If the pump wears a hole in the new rear housing, we will replace the transfer case. This warranty applies to installations with a new rear housing, which this case includes.

Before You Drive

The transfer case ships empty. Fill it with the included 2 quarts (64 fl. oz.) of fluid before operating the vehicle. Driving with an empty transfer case will cause severe damage.

Installation Tips

• Confirm your truck has the push-button or dash knob 4WD control before ordering.
• Move the encoder motor from your old transfer case to the new one.
• Install the new adapter gasket and clean the mating surfaces on the transmission adapter.
• Check the front and rear output seals and driveshaft yokes for wear while the case is out.
• Fill with the included fluid and check for leaks before driving.

Related Parts

• 261XHD Transfer Case (manual shift)
• Merchant Automotive Performance Transfer Case Fluid, 2 Qt
• Transfer Case to Transmission Mounting Nut Kit
• Transfer Case Seal Kit, 263XHD
• Transfer Case Pump Upgrade Kit
• Transfer Case Magnetic Drain Plug Kit

Frequently Asked Questions

Do I have a 261XHD or a 263XHD?

Look at how you shift into 4WD. Trucks with a floor-mounted shift lever have the 261XHD. Trucks with a push button or knob on the dash have the 263XHD, which is this case.

Is the encoder motor included?

No. Reuse the encoder motor from your old transfer case.

Does it come filled with fluid?

No. It ships empty with a 2 quart jug of fluid. You must fill it before driving.

Is the pump upgrade already installed?

Yes. Every case has our pump upgrade installed to prevent pump rub.

Does it fit 2007.5 and newer trucks?

No. This case fits 2001-2007 classic body trucks with the LB7, LLY or LBZ. 2007.5 and newer trucks use a different transfer case.

For warranty information or to submit a claim, see our Warranty Form.

Details:

• Engine Manufacturer: Duramax
• Liter: 6.6 Liter
• Engine Designation: LB7, LLY, LBZ
• Engine Years: 2001-2007
• Transfer Case Model: 263XHD

Applications:

• 2001-2007 Silverado/Sierra 2500HD/3500HD LB7/LLY/LBZ