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Transfer Case - 263XHD

13 Reviews
SKU: 10604


Replace a 263XHD electronic shift four-wheel drive transfer case found in 2001 to 2007 GM Duramax 6.6L V8 diesel trucks with this brand new one from Merchant Automotive - No core charge!

NOTE: Does not include encoder motor.

Why Choose Our Transfer Case?

Includes Our Transfer Case Pump Upgrade:
The GM transfer cases 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. There are 5 tabs around the housing that fit into spots in the rear housing to position the pump. Over time, the pump can start to wear on the rear housing. This issue is referred to as "pump rub". Our Transfer Case Pump Upgrade resolves this problem. Protect your investment by preventing this condition.

Comes with Magnetic Drain Plugs:

Magnetic Drain Plugs catch small debris and help extend fluid life. Kit contains a Magnetic Drain plug and a new fill plug made out of a high strength corrosion resistant 304 Stainless Steel.

Shipped with MA Performance Transfer Case Oil:
  • Promotes transfer case performance
  • Increases shifting performance
  • Dramatically reduces wear
  • Increases component efficiency
  • Blended specifically for use in GM transfer cases
  • May be used in GM, Ford and Chrysler transfer cases
  • For use in diesel or gas transfer case
  • Cost effective upgrade for Auto Track II
  • Performs in manual or electric shift applications
  • Reduces irritating drive shaft clunk
  • Increases drive line performance by reducing clutch chatter
  • Drastically reduces wear on internal components & seals

NOTE: Transfer Case will be shipped with 2 Quart (64 fluid oz.) bottle. The transfer case WILL NOT BE FILLED WHEN RECEIVED. One Transfer Case will use 64 fluid oz. 


Is my 2001 to early-2007 transfer case a NP261XHD or NP263XHD?

The easiest way to know the difference between transfer cases installed in 2001 to early-2007 GM HD trucks is the shift selection mechanism. Both Chevrolet and GMC trucks using NP261XHD transfer cases use manual shift selection with a floor mounted range selector. Trucks with electronic (push button or knob on the dash) shift selection are equipped with the NP263XHD transfer case.


GM 2500HD and 3500 Duramax Silverado - Sierra 6.6 V8 Diesel Trucks




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

Ratings & Reviews

13 Reviews

  • 4 stars
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  • 1 star
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Awesome quality, fit and finish.

Randy - | 11/24/2019 12:01:00 pm

Old transfer case had rubbed through on the rear case half and a hairline crack on the bottom of the front case and was clunking. Local shop wanted 2500 to build me a case with two used halves... No thanks - ordered this and did the install in my driveway with no issues or surprises. I was actually shocked at how smooth it went. Thank you MA!

So far so good. Easy to install.

Bryan - | 08/15/2019 12:01:00 pm

Came packaged very well. Oil included just had to fill it up. Put about 500 miles on since I have had it with zero problems.

Unmatched quality

Seth Mathieu - | 01/20/2019 12:01:00 pm

I own a 2002 LB7 it has the electronic unit I ordered this unit on a Monday night at around 10 p.m. transaction was easy and smooth even with the billing and shipping addresses being different. The next day I revieved email confirmation of my order shipment just did the standard ups shipping with UPS tracking number and estimated delivery date of Thursday that week. Shipment arrived that Thursday about noon. The shipment box was secure and without damage. Didn't know what to expect when opening so I kept the expectations low. Understand me here, this was the highest quality package I have ever recieved. Thick styrofoam protecting ever inch of the unit without any movement possible. The gasket, fluid, and installation tips all nestled securely in their own cubby and a very big without a doubt noticeable tag stating to add the fluid attached to the unit. This is a very high quality product, very clean like new and has barcode stickers and also a certification plate stamped to it. It also came with the sensor on top and a new encoder motor gasket with 3 new bolts for encoder motor installation. Both the filler and drain plugs were very neatly teflon taped and partially installed. All 3 openings for the trans tail shaft and front and rear driveshafts were capped off securely. This unit bolted straight up with out fault and made everything as easy as it should be. As an automotive technician I see a lot of poor quality components, which is not the case here. Everything about this product and experience was to the utmost quality and I would definitely recommend this product and company to anyone. Do not second guess yourself on this purchase. It is well worth the money. 10/10 would purchase again

Exactly what I needed

Jake - | 02/23/2019 12:01:00 pm

Beautiful product. Arrived well packaged, undamaged in any way. Appreciated that Merchant Automotive threw in some of their proprietary transfer case fluid.

No issues at all swapping the previous transfer case off of my 2004 LLY Duramax and installing this new one.

Excellent investment

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

No core, no extra shipping and most importantly, no more transfer case problems. Why take a chance or go through the hassle of rebuilding or trial an error solutions? buy it, replace it, done!

transfer case, best value!

George - | 11/23/2018 12:01:00 pm

I have had this new transfer case installed for over a year now. It has performed flawlessly! Not a leak, works great. This was the easiest install ever, went in great, stopped the noises and clunks from a leaking case and worn out transfer case. Would recommend this unit to anyone and everyone!

Duramax t case

Josh - | 06/26/2018 12:01:00 pm

Great part
All the upgrades . Weill worth the
Perfect fit no leaks etc . Very satisfied much better than stock g.m one

Perfect Fit

Riley - | 10/01/2018 12:01:00 pm

Quick Shipping, perfect fit, Great Quality, couldn't ask for anything better

Improved Tranfer Case

Tom - | 09/26/2017 12:01:00 pm

This case is an improved version of the OEM case. If GM had this case supplied with the vehicle, there would be no need to have to replace an inferior product. As typical of General Motors, they save a nickel, at the expense of the customer. Thanks to Merchant Automotive for product improvement.

New 263XHD Transfer Case

Bruce - | 08/01/2017 12:01:00 pm

Transfer case works great. I already have over 3000 miles since I did the install. It is comforting to know that this item is NEW! I might also add that the staff at Merchant was/is very helpful and the whole ordering process was very thorough, and fast delivery. Good job and thanks again!

New Transfer Case

JAMES - | 08/20/2017 12:01:00 pm

The transfer case arrived in perfect shape. One nice touch was all but one of the wiring sheet metal attachments were included! Nice! Installed and I'm off and running. Truck is so much smoother. No transfer case inch clunksinch after stops. Not a lot of miles on it yet, but so far, I'm really pleased with the product.

Do your home work

Evert Sober - | 08/13/2018 12:01:00 pm

Do your home work and ask Questions, Always heard good things about Merchant Auto.Their Employees are very nice and professional.Just picked up a NEW tranfer case for 05 silverado 2500HD I asked when I came in [ I drove 75 miles one way came in person] Who made the tranfer case I was told it was a New Process transfer case. Im replacing a Magna transfer case That I just bought and installed in November that with less than 4,000 miles is destroyed. I get home and open the box the first thing I noticed is NO drain plugs small thing but susposedly they come with new magnetic plugs. Next I see the build tag it is not a New Process but its is a Magna transfer case. When I called to ask about the drain plugs and that it was a Magna case was told that Magna has bought out New Process thats fine it happens but was never offered to be sent drain plugs that I was susposed to get with my 1900 purchase.Not saying this case is bad but be aware and DO YOUR HOME WORK

1 happy customer right here!!!

Dylan - | 04/08/2020 12:07:00 am

Got exactly what I paid for plug n play and my t-case problems are gone. Can’t put a price on piece of mind. Only negative I’ve got to say which is not MAs fault is the box was tossed around enough by the time I got it by UPS that the gasket had been crushed by the new t-case luckily I had a brand new Udamaged one so it was no big deal, only recommendation for MA is maybe wrap the gasket in cardboard to prevent ups from messing it up. Over all 5 stars. Thanks MA!!