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01-07 GM 6.6L Duramax Merchant 261XHD Transfer Case (With Floor-Shift Operation)

01-07 GM 6.6L Duramax Merchant 261XHD Transfer Case (With Floor-Shift Operation)
01-07 GM 6.6L Duramax Merchant 261XHD Transfer Case (With Floor-Shift Operation)
01-07 GM 6.6L Duramax Merchant 261XHD Transfer Case (With Floor-Shift Operation)
01-07 GM 6.6L Duramax Merchant 261XHD Transfer Case (With Floor-Shift Operation)
01-07 GM 6.6L Duramax Merchant 261XHD Transfer Case (With Floor-Shift Operation)

Available Options


  • Part Number: 10603
  • Est. Ship Time: Usually Ships in 1-2 Business Days

The transfer case on your Duramax truck transfers power from the transmission to the front and rear axles by the use of driveshafts. When a transfer case fails, or starts failing, you will lose performance or functionality of your four wheel drive. Replacing your 261XHD transfer case is a job you do not want to have to do, or pay for twice, so replacing it with a high quality replacement is key.

This transfer case is a direct replacement transfer case for 2001-2007 Duramax equipped trucks with a factory 261XHD transfer case. While this is a direct replacement transfer case, it includes upgraded parts to improve the performance and prevent future problems.  Our famous Merchant Automotive transfer case pump upgrade is included with this kit to help eliminate pump rub, a common problem on factory Duramax transmissions. It will also come with magnetic drain plugs to help catch small debris floating in your oil to extend fluid life. Lastly, you will get 2 quarts of MA performance transfer case oil to finish up your install.


  • Direct Replacement 
  • Upgrade From Factory
  • Built To Resolve Pump Rub


  • Includes Merchant Auto Transfer Case Pump Upgrade
  • Comes With Magnetic Drain Plug
  • Includes MA Performance Transfer Case Oil

What's In The Box

  • 261XHD Transfer Case
  • 2 Quarts MA Performance Transfer Case Oil

Duramax Diesel Transfer Case Upgrade Kit
To repair or prevent pump rub failure on your Duramax diesel engine transfer case, use this Merchant Automotive Duramax transfer case upgrade kit with magnetic drain plugs and performance transfer case fluid. This kit will give you everything you need to help prevent future failures and can be installed as part of your repair to replace the affected parts and prevent future failures. 

In this kit you will receive a Merchant Automotive T-6061 Aluminum CNC-Machined transfer case pump housing to replace your factory housing, transfer case adapter gasket, RTV silicone w/ applicator nozzle, and blue threadlocker

Duramax Performance Transfer Case Fluid
At Merchant Automotive, we are all about increasing the performance of your Duramax vehicle. Here is how our performance transfer case oil can help your truck:

  • 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 driveline performance by reducing clutch chatter
  • Drastically reduces wear on internal components & seals

One typical GM HD transfer case will require 2 quarts, so we have bottled up our performance transfer case fluid in a convenient 2 quart bottle to provide you with a single fill with no waste.

Duramax Magnetic Drain Plugs
The factory plugs on your Duramax transfer case are great and serve their purpose, however, there is always room for improvement. This kit features magnetic drain plugs for your transfer case to catch small metal debris that is suspended in the fluid. This not only prevents these harmful flakes of metal from making their way into the vital parts of your transfer case, but it also makes cleaning them off during every serving interval, very easy.

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.


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

The difference between an NP261XHD and an NP263XHD transfer case is the shift selection mechanism. Chevrolet and GMC trucks using NO261XHD transfer cases use a 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.


Part number: 10603

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