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  • Transfer Case Pump Upgrade and Repair Kit | XHD

Transfer Case Pump Upgrade and Repair Kit | XHD

17 Reviews
SKU: 10772


The Merchant Automotive Transfer Case Pump Upgrade is the best upgrade you can perform on your 2001 to early-2007 GM transfer case by completely preventing the ever increasing problem of pump rub and catastrophic transfer case fluid loss. The basic kit can be installed proactively in a transfer case that has not yet succumb to a pump rub failure as a preventative maintenance measure. If your transfer case has already had a pump rub failure the MA Transfer Case Pump Upgrade can be installed as part of your repair to prevent future failure.

This kit is designed to include the parts necessary to perform an upgrade and repair to a transfer case that has suffered a pump rub failure requiring replacement of the rear case half for vehicles using the NP261XHD and NP263XHD transfer cases with Duramax diesel LB7, LLY and LBZ engines as well as 8.1L gas engines when equipped with the Allison transmission. Note that transfer cases operated without lubrication may also have additional internal damage that will not be evident from external inspection and could require additional parts. When properly installed this kit is backed by a Limited Lifetime Warranty against pump rub failure from Merchant Automotive.


To view/download installation instructions click here.

What is a Transfer Case "Pump Rub" Failure?

GM transfer cases used from 1998 through early 2007 use a gear pump inside the case that is driven off the mainshaft. The pump forces oil to the planetary as well as the drive sprocket sleeve. Because the pump is driven by the shaft, the housing of the pump must "float" in the rear housing. There are tabs around the pump housing that fit into spots in the rear housing to locate the pump housing and prevent it from spinning inside the case with the mainshaft. Over time, the pump tabs can start to wear on the rear housing. GM installed a spring steel clip in the housing intended to prevent wear, but the clip can break and be rendered useless.

Since the pump housing is aluminum and is a harder material then the magnesium rear housing, it can wear a hole in the rear housing and cause a very small leak. This leak is frequently high enough on the case that it typically will not leak when vehicle is not moving and therefore not leaving any drops on the ground; it will however leak while the vehicle is in motion. Unfortunately since the transfer case does not have a low fluid indicator the pump rub failure is often not found until there is transfer case damage from running the case out of fluid.

Avoid costly repairs to your transfer case by preventing "Pump Rub" by installing a Merchant Automotive Transfer Case Pump Upgrade kit in your transfer case today, before it happens to your vehicle.

With installation of this kit, you will have a LIMITED LIFETIME WARRANTY against pump rub. If your case ever wears a hole in the new rear housing with the upgrade installed. We will buy you a new transfer case. The MA Lifetime Warranty will only apply to installations with a new rear housing.


What do I do with the OEM anti rattle clip when installing this upgrade?

Discard the factory clip during installation of the MA Transfer Case Pump Upgrade kit. It's been designed and precision machined to work with the clip removed.

What other parts will I need to install this upgrade and repair kit?

We tried to make the kit all inclusive for an upgrade and repair installation after pump rub failure has occurred without including internal parts (like bearings, shafts, planetary gears, etc...) that may not necessarily be required. Unfortunately there is no real way to know the extent of the damage inside the case until it is completely disassembled. In many instances, as long as the case has not run out of fluid, it can be repaired with the new rear housing and components included in this kit to prevent pump rub from ever happening again. Be sure to refill the transfer case with the Merchant Automotive Performance Transfer Case Fluid included in this kit for excellent lubrication and performance and replace your original drain and fill plugs with the Merchant Automotive Magnetic Drain Plug kit also included with this kit as an additional layer of protection to catch metal debris from the fluid circulating inside the transfer case as well as replacing the factory plugs which are often rounded off or damaged.


GM Transfer Cases
261XHD, 263XHD

GM Duramax Silverado & Sierra 6.6L V8 Diesel or 8.1L Gas Trucks
LB7, LLY, LBZ, 8.1L

2001, 2002, 2003, 2004, 2005, 2006, early 2007

Ratings & Reviews

17 Reviews

  • 3 stars
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Positive Feedback

Robert - | 12/31/2019 12:01:00 pm

Quality product and timely delivery.

Awesome product!!

Kent - | 07/29/2019 12:01:00 pm

Worked great
Instructions from website very clear.

Great quality everything I needed to get the job done

Todd - | 07/24/2019 12:01:00 pm

Had a leak coming from my transfer case turned out it was the pump that rub through this Kit worked perfect very easy to install especially after watching their video.

263XHD Transfer Case Pump Upgrade Combo

Leon Crouch - | 05/26/2019 12:01:00 pm

This kit is one of the best aftermarket kits I've ever bought! After watching the video, the oil pump and transfer case housing install was super easy. All of the components appear to be high quality and everything fits as it should. Much better than trying to scab together all the parts from multiple vendors!

Pump rub kit

Trevor - | 05/17/2019 12:01:00 pm

Pros: came with everything I needed. Made for a very smooth installation
Cons: the snap ring pliers did not spread the snal ring far enough. Plus, they broke. Had to go buy my own snap ring pliers.

Great Part

Tim - | 02/26/2019 12:01:00 pm

The kit came with everything that I needed minus a new clamp for the front drive shaft boot. The repair itself only took about 45 minutes and was very easy to do.

Transfer case/ pump upgrade combo

steve - | 02/08/2019 12:01:00 pm

Shipped fast. I was a little disappointed with the size of the snap ring pliers. They didn’t open up far enough. I wish they had some directions to help with the install. Instead, I watched quite a few YouTube videos.

Pump rub kit

Trevor - | 12/14/2018 12:01:00 pm

This kit came with everything in perfect order except the snap ring pliers. Not only were they not wide enough to remove the snap ring to separate the case half, they broke and I had to stop and go to the store to buy another pair of snap ring pliers. For that, this product gets 4 stars. Everything else in the kits was on-point.

great package, great product

Al - | 09/28/2018 12:01:00 pm

Easy install great product

07 LBZ

Calvin - | 06/18/2018 12:01:00 pm

Originally threw a rear U joint which damaged the rear of the transfer case. After poking around the interweb I found this kit. It was a little more expensive but the reviews were good. Installed the kit, couldn't be happier. Everything I needed was in the kit and was of high quality. Good job Merchant!

Transfer case upgrade

Nicholas - | 08/31/2018 12:01:00 pm

Fast shipping, everything come packaged nice, and the kit has everything you need. I would recommend this kit.

Pump rub issue.

Todd - | 08/22/2018 12:01:00 pm

The kit completes with all the important parts to repair transfercase rub issue. I would recommend that you also get a front driveshaft boot kit as the kit does not come with the straps to reinstall the boot. The snap ring pliers that come in the kit do not open far enough to effectively get the snap ring back on during the reassembly process. Other than that this is a good kit.

Good kit

Calvin - | 06/04/2018 12:01:00 pm

Had everything I needed and the transfer case never sounded better!


JOHN F - | 03/22/2018 12:01:00 pm


transfer case upgrade

Rod - | 04/09/2018 12:01:00 pm

Parts fit perfectly, and instruction video a great help.

Great product

Jeff - | 03/01/2018 12:01:00 pm

Came with everything I needed.

NV 263XHD Kit Review

William - | 03/19/2018 12:01:00 pm

The kit was great!!! I have only one relatively minor complaint, so if I could have given you 4.8 stars, I would have.
I have a couple of comments. First, the snap ring pliers weren't quite wide enough to get the ring clear of the bearing. I ended up breaking one of the tabs off the pliers trying to spread them another 1/16th of an inch.
I found another pair at O'Reilly's Auto Parts that worked first time after I removed their spring.

The other issue is that I can't tell what kind of oil you provided, so it makes it hard to change it every year if I have to order the oil from MA. If you could share info on the type of oil you recommend, at least I would have the options of buying it from MA, buying it locally, or just going back to ATF.

Bill Thompson