Fri. Apr 19th, 2024
Rebuilt Versions

For the 1999 model year, GM released newly redesigned versions of the Chevrolet Silverado and GMC Sierra pickup trucks. New Venture Gear launched a new line of transfer cases as part of the upgrade for these models. One of them is the NV 261 transfer case. These transfer cases are basically more powerful variations of the NV 241 transfer cases that were in use before 1999. For the 2001–2007 Chevrolet Silverado 2500HD and GMC Sierra 2500HD, the rebuilt NP261–HD transfer case is a manual-shift transfer case.

About the NP261-HD

The NP261HD transfer case is a manual shift device that was first manufactured by New Venture Gear. This type features left-side drop output with a low gear ratio of 2.72 to 1. This unit has a 2-high, 4-high, neutral, and 4-low combination. The 261HD has a female 32-spline front output, a 32-spline rear slip output, and a 32-spline front input.

Chain-driven models are used in the NP261 transfer case model. The 4WD NP261 has a manual shift. It makes use of rear slip yokes. Several pickups come with heavy-duty (HD) and extreme heavy-duty (XHD) models with wider chains, sprockets, and HD planetary.

Problems with 261HD units

The original rear case half of the 261HD models have a design flaw in which the oil pump scrapes against the case. It caused pinholes in the delicate, thin magnesium shell. Since fluid seeps out of these pinholes and evaporates, the transfer case is not properly lubricated or cooled. This problem takes place too slowly to be noticed until internal mechanisms become damaged enough. This is known as “pump rub.” The oil pump housing can eat a hole in the unit’s case, which can lead to fluid leakage and premature case failure in this unit.

The NP 261 transfer case is also prone to complications caused by running it on hard surfaces such as concrete or asphalt. 4WD exclusively runs on loose ground, snow, mud, sand, or grass since the varying wheel speeds in turns can place severe torque loads on chains and sprockets.


Replacing the back case with the new design is a better option. Upgraded replacement casings completely resolve the “pump-rub” issue. In the original cases, these halves were made of heavy-duty aluminum rather than thin magnesium. Additionally, these versions avoid the need for an adaptor plate by correcting a snap-ring groove issue. The rebuilt version also includes a machine case protective plate to prevent premature case failure.

Required Kits To Upgrade 261HD units

The following parts are required to rebuild NP261 transfer cases:

  •       gaskets and seals,
  •       small parts and thrust washers,
  •       bushings individual bearings,
  •       forks, hubs, sliders
  •       oil pump and planets
  •       chain and sprockets,
  •       shafts input and main,
  •       cases of housings and miscellaneous parts
  •       chains clutch and viscous couplers


Finding the exact parts that need to be replaced can be tricky at times. However, expert mechanics can help identify the right parts to replace the failed ones. Specialists can help identify the problem, order the appropriate part(s), and provide ongoing phone service during the reassembly process if needed. Some also have a huge stock of remanufactured NP 261 transfer cases and transfer case parts. Before buying, one must check whether a 261 transfer case part has been tested at the factory.

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