The NP242 transfer case was introduced in 1987 and provides the option of both full- and part-time function with four operating modes. The medium-duty transfer case is built using a cast-aluminum housing. It is quite similar in design to many other New Process chain-drive cases, however, an added differential assembly on the mainshaft allows for high-range 4WD use under any conditions. And, like all the other transfer cases, it has traditional, locked mode for typical part-time high-range and low-range 4WD operation.
Weight of the NP242 is about 85 pounds, and the Jeep unit has a driver-side front output. High-range gearing is 1:1; low-range is 2.72:1.
These transfer cases are quite durable when used under reasonable conditions. Long-term, severe use can cause the drive chain to stretch and the synthetic pads on the shift forks to wear. One of the common causes of failure is excessive wear due to lack of lubrication. The NP242 uses an internal oil pump to move lubrication where needed. When fluid levels inside drop due to a seal leakage or other reasons, the case can run hot and start to wear parts prematurely. Once the transfer case is opened up for repair, a magnet in a pocket at the bottom of the housing can be examined for signs of metal wear and debris.
We completed our rebuild using mostly common mechanic tools on a home workbench, and did use a press on a couple of bearings. To do the job yourself, you will want a good set of flat-bill retaining ring pliers, a large socket for the front yoke, and likely an internal-type bearing puller. The Yukon kit from Randy's Worldwide provides replacements for the common wear items. While inside, you'll also want to inspect for chain damage or excessive wear, pump condition, and the condition of all internal gear components including the annulus gear inside the front case.
Here is the Yukon rebuild kit. It includes replacement bearings, seals, thrust washers, shift fork pads, O-rings, and the gasket used to mate the NP242 to the transmission.
We started the disassembly at the front output by removing the yoke. An impact wrench will usually spin the nut right off while you hold the yoke, but if you don’t have one this can be done with a bolt-on flange tool or the yoke can be held with a large pipe wrench. Then, we unbolted the aluminum extension housing, removed the mainshaft snap ring, and unbolted the retainer housing shown here. This exposes the oil pump.
Next, we removed all the bolts that secured the rear case to the front case and separated the two halves. The designers provided specific pry points on most of these housings to keep you from having to pry against the machined sealing surfaces.
With the rear case and oil pump assembly removed, the snap ring securing the drive sprocket was removed from the mainshaft. This allowed removal of the sprocket, front output shaft, and chain.
The mainshaft was removed from the housing. Here you can see the type of differential assembly that is added to some New Process transfer cases to make them capable of full-time 4WD operation.
The external shifter lever and the shift detent components were removed to allow for low-range shift rod removal. The service manual recommends pulling a roll pin from the shift rod using a No. 1 screw extractor. This can be troublesome, and we weren’t successful pulling the pin out. Instead, we manipulated the mode fork assembly and shift sector to allow ourselves to work the assembly out while strategically prying as needed. Then the shift sector could be pulled from the housing.
Turning our attention to the input side of the NP242, we removed the front bearing retainer and the input snap ring behind it.
The input and low-range gears were pulled from the housing. Sometimes these can be sticky and require a light push from a hydraulic press, but often a few taps from above with a hammer and drift will drop them free of the input bearing race.
The low-range-gear assembly was disassembled and inspected, then put back together with a fresh pair of thrust washers. A snap ring holds the gear unit together. After removing a few bearings and seals from the housings, we inspected and cleaned everything for reassembly.
We pressed a new pilot roller bearing to the correct depth into the input gear using a rod of the proper diameter in a press. We used automatic transmission fluid for lubrication during assembly.
Once a new input bearing was pressed into the front case, the low-range-gear assembly was put in the case and we torqued the front bearing retainer with new oil seal. The retainer and all other seal surfaces on our transfer case were sealed using RTV silicone.
The shift sector was replaced in the housing along with a fresh O-ring and the nylon outer bushing.
New pad inserts were installed on the low-range fork, then the fork and its hub were engaged to the input gears and the shift sector.
The differential assembly had been removed from the mainshaft for inspection and to allow for replacement of the roller bearings. We held the shaft vertically while sticking each roller to the shaft with chilled petroleum jelly.
After the roller bearing replacement, the differential assembly was returned to the mainshaft and secured with its snap ring. The shaft assembly along with the mode fork and shift sleeve were slid back into the case.
Here is the shift rod roll pin we mentioned previously. We drove it out of the shift rod once the shift assembly was out of the case. For reassembly, it's necessary to drive it back into the shift rod through this access hole in the front case. A rubber plug seals the hole when done. Note that, for disassembly, there’s insufficient room inside the case to simply drive the roll pin completely through the shift rod to free it.
The shift detent components were put back into the case. They drop in from the bottom of the case and the detent engages with the bumps on the shift sector.
The drive sprocket, front output shaft, and chain were reassembled onto the front case. Our chain was in good shape so we simply reused it. We placed the magnet back in the bottom of the front case for reassembly.
The rear bearing for the front output shaft is blind in the rear case, so an internal bearing puller is needed for removing it. A new bearing was pressed into the pocket. The oil pump was fitted with a new seal and held on the rear case along with the pickup tube and filter screen.
Holding the oil pump in position, we fitted the rear case back onto the front case using RTV silicone at the sealing surface. We torqued all the bolts on the housing castings to 30 lb-ft.
We installed a new bearing in the rear retainer and bolted it in place on the rear case. A snap ring positions the bearing to the mainshaft. Then the rear extension housing received a new oil seal and was bolted down.
A new oil seal had been installed in the front case at the output shaft. Finally, the front output yoke was slid into place with a bit of RTV silicone added to the splines. The yoke nut was torqued to 110 lb-ft. Before installation, the transfer case was be filled with about 1 1/2 quarts of automatic transmission fluid.
Here is the completed case ready to be reinstalled. A tag on the rear of the transfer case lets you know the specifics of manufacture. Info includes the model number, assembly number, serial number, and low-range ratio. This case was factory built on October 12, 1988, and now it has been rebuilt nearly three decades later.