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Dana 18 Transfer Case Garage Rebuild

Posted in How To: Transmission Drivetrain on April 9, 2018
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The Dana 18 transfer case was in place behind the transmissions of Jeeps beginning in 1940 and lasting until 1971. Different versions of the Dana 18 have seen the grunt of the battlefield, worked around the farm, and cruised the town in the first luxury Jeep—the CJ-5A Tuxedo Park. This old-school transfer case is a completely gear-driven design that is stuffed inside of a cast-iron case. The Dana 18 also had the auxiliary options available like an overdrive unit; power take-off (PTO) unit that can be used to run implements such as a winch, trencher, welder, belt drive drum; and just about anything you can think of. Check out our “Dana Spicer 18—The Best Transfer Case Ever?” article ( for more reasons why this venerable transfer case should be rebuilt instead of going on the scrap pile.

While these transfer cases are gear driven, tough, and durable, some could be nearly 80 years old, and the wearable internal parts have seen much better days. They are also known to leak oil from time to time, and that leads to advanced wear if neglected (fluid level not checked regularly). If your transfer case is popping out of gear or has excessive endplay on the output shafts, then it is time for a rebuild. No matter which version of the Dana 18 you have, all of the parts are available to get it back into working order. We show you the major steps to rebuild the Dana 18, along with a few tricks in the name of continuous improvements.

At this point in our Dana 18 transfer case rebuild its guts were being disassembled and made clean again, and its case was freshly painted. We did all this while the intermediate gear was off to Herm the Overdrive Guy for machine work.
This Dana 18 came out of a 1968 CJ-5 with a Dauntless V-6. Considered the Super Dana 18, it’s the large 4-inch bore, 1.25-inch intermediate shaft version of the case that is built in a Dana 20 shell. It has the shifter linkage for a single-stick setup that was meant to be a little simpler than the twin-stick and take up less space in the cab. We plan to change it to twin-stick for more options off-road and for a more vintage look in the 1946 CJ-2A the Dana 18 will be used in.
After removing the oil pan, the retainer clip that holds the intermediate shaft in place (located on the back of the case) can be removed. The shaft is easily tapped out toward the rear of the case. Then the gear can be pulled along with the thrust washers and needle bearings that the gear rides on. Traditional rebuilds kits would include a new intermediate shaft, needle bearings, and thrust washers. For this rebuild we are going to do something a little bit different though. We shipped the gear to Herm for machine work and threw the worn-out parts in the trash.
The emergency brake backing plate needs to be removed so that the rear bearing retainer can be taken off. There is sealant holding it on as well, so it may take a light tap from a brass hammer to dislodge it. Be careful not to damage any of the shims that are behind the bearing retainer, they will be reused. If you do damage them, do not attempt to reuse—accept defeat and order new ones.
On the front bearing retainer there are two plugs holding in the detent balls, springs, and interlock pin for the shifters; they all need to be removed. Five bolts later the front bearing retainer and shift rail housing will slide off, and then you are only one snap ring and some light hammer tapping away from the entire main case being empty. As each piece came off we laid it out on the workbench in the order and orientation that it came off. Taking detailed pictures while disassembling helps when putting it all back together.
One snap ring holds the front-wheel drive cog and bearing in place. The bearing will be replaced, and then installed into a different front bearing retainer that was meant for twin-stick shifters. The shift rails are also different for a twin-stick shifter, so we have new ones to replace those as well.
Before the transfer case was disassembled, we took a close look at where to drill and tap the case for fittings to outfit it with an oil sight tube so that the oil level can be checked easily, quickly, and without tools. Triple-check the placement of where you can fit your fittings, taking into consideration things like PTOs and overdrives. Now that the case was empty, we drilled and taped the holes for 1/4-inch NPT fittings and then cleaned all of the shavings out thoroughly.
The front output bearing on the front output shaft was easily removed using a simple three-jaw puller. The tapered roller bearing on the rear output shaft was removed the same way, and then a new bearing installed on each shaft. It did not take very much force to remove or install either of the bearings.
The right side of the rear output shaft is hollow and contains a bushing. That bushing measures 0.628-inch ID when new. If it is 0.631-inch-or-larger ID, then it should be replaced. This is not a simple task and should not be done if it does not need to be. It is too small for a pilot bearing puller. A hacksaw blade was used to make a slice in the bushing so it could be removed. You can see the difference in the old bushing on the top left, and the new bushing on the top right.
Installing the new bushing was no easier than removing the old one. It was lightly tapped into the shaft to get it started, then carefully pressed in the rest of the way with a hydraulic press. The bushing ID will shrink a little bit from being pressed into the shaft. We had a local machine shop ream the bushing back to 0.628-inch for a few bucks. If you have access to a lathe, it would be worth the time to make a special press pin with a shoulder on it to fit the ID of the bushing. We’ve heard of success with that method and it didn’t require additional machine work.
Since we are converting this transfer case from a single-stick to a twin-stick, the shift rails were swapped out. The two rails on the left with the slots on the bottom are for twin-sticks. The two on the right with holes are for the single-stick shifter.
Now we are moving into reassembly—finally! This is the front output bearing retainer and shift rail housing for a twin-stick design. The front output shaft was installed and tapped into place and the snap ring installed for retention. The gear selector and shift rail also needed to be installed before the assembly could be slid onto the case.
The first thing to go into the case was the shaft rail, and then a shift fork was slid on and screw-tightened to hold the fork on the rail. Then the sliding gear was placed onto the shift fork to hold it while the rear output shaft was slid into place.
Next, the output shaft gear (left) dropped behind the slider gear (right), and then the output shaft slid through them both. A light tap with a brass hammer helped seat the bearing completely into the case.
There is a keyed thrust washer that slides onto the front of the output shaft that was just slid through the gears. The key lines up with the deepest groove on the shaft. Once it is seated, there is a snap ring that holds everything in place. Notice the new shiny pilot bushing that was installed. The front output shaft tip spins in there to keep everything in line.
The first time the front bearing retainer is installed it is a dry run, meaning no gasket sealant is used. The front output shaft and 4WD shift fork have been preassembled into the housing here. A snap ring holds it all in place.
The rear bearing retainer was reinstalled with the original shim pack, again with no sealant the first time around. We want to ensure we have proper rear output shaft endplay (0.002-0.006 inches) before we glue everything in for good. If it’s too tight, add some shims; if it’s too loose, then remove some shims.
Once the endplay was dialed in, it was time for final assembly. One of the goals of every rebuild is to eliminate (or at least reduce) any leaks. We like to use Permatex Aviation Form-A-Gasket on all of the gaskets.
This stuff is also a thread sealant, so it was also applied to any of the “wet bolts” that penetrate into the interior of the case. Oil will leak past the threads if they are not sealed.
The story this picture tells is about the roller tapered bearing setup for the intermediate gear that no longer uses needle bearings and thrust washers. This improves longevity and reduces some of the noise that this transfer case is known for. The intermediate gear should to be sent out to a well-informed machinist who can work on hardened gears, not that guy down the street. Ours was shipped to Herm the Overdrive Guy for the machine work. When installing the intermediate shaft, I like to put a small bead of black RTV around the end of the shaft that does not have O-rings to try to seal where it engages the case, just for luck if nothing else.
The bearing races were installed into the new recesses in the intermediate gear so that the cones of the bearings face inward toward each other, similar to a full-float wheel bearing. We installed the bearings into their races before slipping the assembly into the case. The intermediate shaft slides into the case from back to front to support the gear. There is a special shoulder bushing that preloads the bearings. It should be tightened in a similar fashion to a wheel bearing—snug, but the gear should move freely. Be sure to install the cotter pin.
One of the common leak points is the inspection cover. Most of the time it is due to the bolts having been over-tightened, which dimples the holes. It will never seal correctly without a flat gasket surface. Five minutes with a hammer and some sort of anvil-like surface can do wonders to revive a stock cover. If it continues to leak after that, then there are some cool aftermarket pans available.
Now a decision has to be made: Reassemble the interlock pill, detent balls, and springs, or leave out the interlock pill. On certain transfer cases like the Dana 300, removing the pill would be a bad idea. For a twin-stick Dana 300, one stick operates the front axle, and one operates the rear axle. Removing the interlock pill in this case would allow you to shift one axle into high range and one into low range, causing catastrophic damage. The Dana 18, on the other hand, shifts differently because both front and rear outputs are offset. One stick operates Low-Neutral-High, while the other controls 2WD/4WD. Removing the interlock pill for the Dana 18 will allow for 2WD low range, which is nice to have for certain on- and off-road situations.
The last anti-leak trick we have up our sleeves is around the yokes themselves. Herm’s premium rebuild kit comes with double-lip seals for around the yoke and felt seals for the end of the yoke. We like to add a conservative amount of black RTV in the splines of the yoke and output shafts. Eliminating all paths oil could potentially travel through is the goal.
When dealing with aftermarket parts, it’s always a good idea to pre-fit your components before adding any sealant. This transfer case was up and down 15-plus times to make sure it fit properly to the transmission. It’s being mated to a T-18 transmission via a Novak Adapter, and the shifter mount had to be shaved about 1/4-inch to fit against the larger T-18 transmission case, just barely leaving the pivot pin set screw intact. Notice how close the intermediate shaft nut is to one of the transmission mounting locations. The aftermarket Novak adapter had to be clearanced to allow the transfer case to mount completely flush without interference.
The freshly rebuilt transfer case is all buttoned up and back into the Jeep. The oil sight tube is tucked behind the e-brake drum, so it can be checked with a quick glance. When the fluid level is full, there is about a 1/4-inch of fluid that can be seen above the tip of the brass barb fitting. When no fluid can be seen, it’s time to top off the gear oil.

The Same, But Not

Several different versions of the Dana Spicer model 18 transfer case have been made over the years. They are all basically the same, but different (as they say). Here’s a quick look at the Dana Spicer 18 applications.

Military transfer cases (1941–1945)
1.97:1 low-range ratio
0.75-inch intermediate shaft diameter
Twin-stick shifters

Early civilian model (1945–1946)
2.43:1 low-range ratio
0.75-inch intermediate shaft
3.156-inch input hole
Twin-stick shifters

Mid civilian model (1946–1955)
2.46:1 low-range ratio
1.125-inch intermediate shaft
3.156-inch input hole
Twin-stick shifters

Late civilian model (1955–1971)
2.46:1 low-range ratio
1.25-inch intermediate shaft
3.156-inch input hole
Twin-stick shifters

Super Dana 18s (1966–1971)
Found behind the Buick V-6–equipped Jeeps
Used the stronger sister Dana 20 case
2.46:1 low-range ratio
1.25-inch intermediate shaft
Larger 4-inch input hole in case
Single-stick shifter


Novak Conversions
Logan, UT 84321
Herm The Overdrive Guy

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