Welcome To Merchant Automotive—The Duramax Diesel Engine & Allison Transmission Performance Specialists You Can Count On!

Merchant Automotive Rear Transfer Case Housing - 261XHD, 263XHD | 2001 - 2007


Due to daily fluctuating stock levels, please call (616) 772-9551 for time sensitive orders.

Our Guarantees

Truck Expert a call away The fastest shipping lifetime customer support

Product Information

  • See items A9, A11 in the exploded image view


  • Direct Replacement
  • Cast To OEM Specs
  • Great For Pump Rub Prevention/Repair
  • No Core Charge


  • Cast In Magnesium
  • Slip Yoke Pushing And Driven Sprocket Support Bearing Included
  • Includes Limited Lifetime Warranty Against Pump Rub
  • Fits 2001-2007 Duramax Diesel Engine Trucks W/ an Allison Transmission

A11 263XHD/261XHD Rear Transfer Case Housing

If you are needing to replace the rear transfer case half on your 2001-2007 GM Duramax diesel, this Merchant Auto NP261XHD/NP263XHD Transfer Case Housing is exactly what you need. This rear transfer case half is casted to OEM specs out of Magnesium which has been proven to be superior when compared to cheap aluminum knockoffs. It is a direct replacement and an upgrade for your factory housing to prevent and repair cases that have been damaged by pump rub.

This replacement NP261XHD/NP263XHD Transfer Case Housing comes with a preinstalled driven sprocket support bearing and slip yoke bushing. You will need to supply your own rear output seal, drain and fill plugs. You can reuse your factory components, but we suggest purchasing a new Merchant Automotive Rear Output Seal and a Merchant Automotive Magnetic Drain Plug Kit to give your transfer case a complete refresh. Don’t forget your transfer case fluid! You will need 2 quarts to refill your transfer case and you can pick up our Merchant Automotive Performance Transfer Case Fluid to make things easy. This fluid is designed specifically for heavy duty transfer cases to ensure your new case is thoroughly protected.

If you are purchasing this rear case to repair or prevent a Pump Rub failure, we invite you to check out our complete Merchant Automotive Transfer Case Pump Upgrade Kit. This kit is all-inclusive and the perfect solution for 1998-early 2007 GM transfer cases that are susceptible to Pump Rub. This kit is perfect for installing when replacing the case half.

With the installation of the MA transfer case Pump Upgrade kit, you will have a LIMITED LIFETIME WARRANTY against pump rub. If your Allison transmission-equipped, Duramax diesel transfer 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 only applies to installations with new rear housing.

Merchant Auto Pump Upgrade Installation Video

Truck U Segment On Merchant Auto Transfer Case Pump Rub Kit

Purchase RTV Silicone For Sealing Case Halves

What Is Pump Rub?

Pump Rub refers to a gear pump failure in GM transfer cases from 1998-early 2007. The gear pump works by forcing oil to the planetary as well as the drive sprocket sleeve. The gear pump is driven by a shaft, so the housing of the pump must “float” in the rear housing of the transfer case. The pump housing has tabs 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, these pump tabs can wear on the rear housing and start to wear on the aluminum pump housing causing a small leak. Due to the location of the leak, many vehicles do not experience dripping while parked, but rather while driving, leaving it gone unnoticed. The transfer case on these vehicles do not have a low fluid indicator, which means that by the time the problem is noticed, it is usually too late.

From the factory, GM installed a spring steel clip in the housing to prevent this type of wear, but this has proved to break and become useless in these situations.

With the installation of this transfer case repair/upgrade kit, you can prevent this before it happens and avoid costly repair bills. You will also get a LIMITED LIFETIME WARRANTY against pump rub. If you have this kit installed and your case wears a hold in the new rear housing, we will buy you a new transfer case. This warranty will only apply to installations with a new rear housing.

Reviews & Questions