The Novak Guide to 

Rebuilding the Jeep / IH Dana 20 Transfer Case


The Dana Model 20

The Dana Model 20 transfer case makes for an enjoyable and satisfying rebuild project. Individuals can obtain outstanding results with some information, good parts, and pride in their work. A non-leaking, quiet and cooler running Dana 20 can be acheived with modern bearings, better seals and gaskets, improved lubricating fluids and a specially hardened intermediate shaft.

Preparation for the Rebuild

Rebuilding Tools & Supplies

You probably already have most of the tools required to build a transmission, including wrenches, ratches, screwdrivers, scrapers, hammers, etc. Additional tools and supplies that may be less common:

  • A urethane or plastic mallet
  • Bearing puller (helpful, but not required for a T90 rebuild)
  • Pliers, snap ring, bevel (Eaton) style
  • Large arbor press or hydraulic press
  • Transmission assembly grease. Never use axle or conventional grease as it will not dissolve into the fluid and plug passages to the ruin of your transmission. Choose something tacky, which will allow you to stick parts together. We use Smart Blend Synthetic Assembly Lubricant #5500. Petroleum Jelly is a decent alternative. Store your assembly lube in the fridge to increase the tackiness for loading those pesky needle bearings. Your assembly grease will melt into the gear oil upon first operation of your fresh transmission.
  • Gasket sealants: RTV (Permatex Black or Grey, The Right Stuff, Aviation Gasket Sealer, etc.)
  • Safety glasses or goggles. Take a poppet ball, snap ring, solvent or case-hardened shaft / gear fragment in your eye and you’ll become a convert


You may choose to pressure wash the transmission prior to putting it on your bench. If you plan on doing a partial rebuild (upper end / mainshaft changeout) only, getting it as clean as possible prior to disassembly is important. If you do this, do not allow the transmission internals to be in contact with water for any real length of time.

If you are going to be solvent bathing your transmission and its disassembled components or hot tanking the case, you may forego the pressure wash. Scrape as much grease off the case as you can and then clean up the bench. Don’t worry too much about getting the outside of the case completely clean because it will be completely disassembled and cleaned. Your spouse’s dishwasher is actually a decent option, but we’ll advise that the interpersonal consequences could be quite heavy.

Model 20 Disassembly

Remove the five bolts that retain the rear output unit to the transfer case. One of these is longer than the others—take note of its location. Tap the rear output assembly with a soft-faced hammer to break it loose and remove it as a unit. If the end play in the rear output unit is correct (see inspection section) it is not necessary to disassemble this unit. If the rear output shaft seal is leaking, the yoke or flange (depending on U-joint type used) can be removed and the seal pulled out with a seal hook. Install a new seal, the yoke, and torque the yoke or flange nut to 175 foot pounds. If the rear output unit should need disassembly, refer to the last part of this disassembly section.

Remove the bottom cover (oil pan).

Remove the bolt and lockplate from the intermediate shaft. Drive the intermediate shaft out towards the rear of the case with a soft drift and a hammer. The shaft must be driven out rearward as the rear portion of the shaft is .0015 larger and will damage the case if it is driven out towards the front. Remove the intermediate gear, 48 roller bearings, three spacer washers, and two thrust washers from the case.

Remove the front output yoke nut, holding the yoke with a large pipe wrench or bench vise. Remove the yoke using an appropriate sized two-leg gear puller. If the front output seal is to be replaced, it should be removed from the front cap.

Remove the shift linkage, plugs, or switches from the top of the front output cap.

Remove the rear cover from the case. DO NOT drive a screwdriver or similar tool between the cover and case to break it loose. This will damage the adjusting shims.

Use a soft hammer or drift to tap the output shaft to the rear, thereby removing the bearing cup from the case.

Cut the safety wire and loosen the lock screw that retains the shift fork to the rod. Tap the shift rod to the rear to remove the cover, then tap the rod out the front of the case. The low range gear, fork, and front drive gear may now be removed. (Some units use socket setscrews and are not safety wired.) Don't lose poppet ball and spring.

Remove the front output cap bolts and front output cap assembly. Refer to end of this disassembly section if front output unit needs to be disassembled.

On 1962-1965 model 20's that use the thrust washer, tap a large screwdriver between the front bearing cone and the gear to separate these far enough to remove the snap ring from its groove. Do not pry against the gear teeth when separating this bearing as it will almost always chip a tooth. With the snap ring removed and on the forward part of the shaft, the shaft may be withdrawn from the case allowing the gears, thrust washer, and snap ring to be removed from the case. The remaining shift fork can now be turned to gain access to the lock screw, allowing the fork and rod to be removed from the case. It is advisable to take note of the position of the shift forks so they may be properly installed at reassembly. (Item #60 and #61 are found only on 1962 to 1965½ model 20 transfer cases.) On model 20's that do not use the thrust washer, the shaft can be pulled from the bearing. These units use a spacer between the bearing and the shaft instead of the thrust washer and snap ring.

If necessary, the rear output section may be disassembled as follows: Remove the rear yoke and oil seal. Unscrew the speedometer driven gear from the rear housing. Rap the shaft on the end of a block of wood to remove the bearing cup and remove the shaft from the rear housing. The shims between the speedometer drive gear and bearings are what controls the rear shaft end play. End play checked with a dial indicator should be .002 to .005 with the unit assembled and the yoke nut torqued to 175 foot pounds.

Front output cap disassembly and inspection: Remove the front yoke and oil seal if not already done. Remove the indicator light switches or plugs, if not already done. Remove underdrive and direct shift shaft. Remove housing from front wheel drive shift shaft. Shift shafts should be cleaned so as not to damage new seals. Remove the shift shaft seals, if necessary. Assembly of this unit is in reverse order of above.


1. Shift Rod - Rear Output Shaft Shift Fork 
2. Shift Rod - Front Output Shaft Shift Fork 
3. Shift Rod Oil Seal 
4. Interlock Plug 
5. Interlock 
6. Poppet Ball Spring 
7. Poppet Ball 
8. Front Bearing Cap
9. Front Bearing Cap Gasket 
10. Front Output Shaft Thrust Washer 
11. Front Output Shaft Gear 
12. Front Output Shaft Sliding Gear 
13. Setscrew 
14. Front Output Shaft Shift Fork 
15. Front Output Shaft 
16. Front Output Shaft Spacer 
17. Front Output Shaft Front Bearing Cup 
18. Front Output Shaft Front Bearing 
19. Filler Plug 
20. Transfer Case 
21. Thimble Cover
22. Front Output Shaft Rear Bearing 
23. Front Output Shaft Rear Bearing Cup 
24. Front Output Shaft Rear Bearing Cup Shims 
25. Cover Plate 
26. Intermediate Shaft 
27. Intermediate Shaft 0-ring 
28. Lock Plate 
29. Lock Plate Bolt 
30. Rear Output Shaft Front Bearing 
31. Rear Output Shaft Front Bearing Cup 

32. Speedometer Drive Gear 
33. Rear Output Shaft Bearing Shim 
34. Rear Bearing Cap Gasket 
35. Rear Bearing Cap 
36. Breather 
37. Rear Output Shaft Rear Bearing Cup 
38. Rear Output Shaft Rear Bearing 
39. Rear Bearing Cap Oil Seal 
40. Rear Yoke 
41. Rear Yoke Washer 
42. Rear Yoke Nut 
43. Speedometer Sleeve 
44. Speedometer Driven Gear 
45. Speedometer Bushing 
46. Bottom Cover Gasket 
47. Bottom Cover 
48. Drain Plug 
49. Rear Output Shaft 
50. Rear Output Shaft Sliding Gear 
51. Main Shaft Gear 
52. Setscrew 
53. Rear Output Shaft Shift Fork 
54. Intermediate Gear Thrust Washer 
55. Intermediate Gear Bearing Spacer 
56. Intermediate Gear Shaft Needle Bearings 
57. Intermediate Gear Bearing Spacer 
58. Intermediate Gear 
59. Intermediate Gear Shaft Needle Bearings 
60. Intermediate Gear Bearing Spacer 
61. Intermediate Gear Thrust Washer 
62. Front Bearing Cap

Model 20 Inspection

Wash all parts thoroughly in a suitable solvent to facilitate inspection. Check the case for cracks that may run from the intermediate shaft bore down to the bottom cover surface or from the output shaft bearing bores down to the bottom cover surface. If cracks are present here they will usually be "hairline" type. A very clean transfer case and a magnifying glass are advisable for this inspection. Unfortunately, if the case should be cracked, it must be replaced as there is no satisfactory way to repair it.

Check the intermediate shaft for signs of the rollers "working on" the shaft surface. These 1-1/4" shafts hold up pretty well, but any sign of wear should be reason to replace the shaft, roller bearings, and thrust washers.

Check the condition of the front output gear bore and shaft for signs of galling caused by running in low range with the transfer case low on oil. Replace as necessary.

Inspect the bore of the intermediate gear for roughness, pits, and wear. Use your thumbnail to judge the presence of an objectionable bearing wear ridge in the bore.

Use a smooth file to deburr all the gasket surfaces on the case, front output, rear output, and rear cover.

Carefully clean the adjusting shims for the output shaft bearings using ScotchBrite or similar abrasive. New shim kits are available (typically supplied with our gasket kit) and are automatically include in our master rebuild kits.

Model 20 Assembly

Install the front-wheel-drive shift rod part way into the case. Put the front wheel drive shift fork on the rod in the same position as it was. Install the lock bolt in the fork making sure the bolt enters its hole in the rod. Tighten bolt 12 to 15 ft. lbs. and replace with safety wire. The safety wire is important. If you transfer case uses Allen style set screws, you will use a drop of temporary thread locking compound (e.g., LocTite Blue).

Set the front output shaft sliding gear on the fork with the gear teeth facing the front of the transfer case.

Install the rear bearing cone assembly on the front output shaft, if it was removed.

When filling your Dana transfer case with gear oil, we recommend that you select a conventional mineral oil or a para-synthetic in lieu of a full synthetic oil. Properly assembled manual gearboxes do not have the thermal strains seen by combustion engines or hypoid gears. Synthetic fluid in these gearboxes, while not harmful, is probably an economic waste.

Hypoid gear oil is sulphurized higher than transmission oil and can be mildly corrosive to the non-ferrous alloys used for bushings and thrust washers in these transfer cases.

An 80W-90, API-GL5 or MT-1 rated fluid is very good.

Hold the output shaft gear in the case and install the front output shaft through this and the front sliding gear. Install the thrust washer and a new snap ring on the shaft. It is advisable to always use a new snap ring here whenever it is removed, if the unit being worked on had one. On units without thrust washer, install the spacer.

Install the front bearing cone assembly on the front output shaft.

Install the front and rear bearing cups.

Install the front output housing using a new gasket. Torque the retaining bolts to 30 ft. lbs.

Carefully tap the rear bearing cup forward to seat the front cup against the front output housing. This should (if properly done) remove all the end play in the front output shaft, thereby preparing it for end play adjustment. This is done as follows:

Hold the rear cover plate against the rear bearing cup and measure the gap between the cover and case with a feeler gauge. Add .010 to this reading to determine the trial shim pack thickness. Install the trial shim pack and rear cover torquing the bolts to 30 ft. lbs. (These adjusting shims come in .003, .010, and .031 thickness.)

Install the initial shim pack and rear cap and tighten the four rear bolts to 30 foot pounds. The output shaft, gear, and bearings assembly must now be moved rearward to seat the rear bearing in the rear cap. The easiest way to do this is to use the end of a block of wood and a hammer and rap the rear cap (not the shaft). The inertia of the impact will seat the rear bearing. Failure to fully seat these bearings is a common occurrence, and stacking an unholy number of shims up to get endplay is not the answer.

Mount a dial indicator on the case with the contact tip of the instrument on the end of the front output shaft. Move the shaft back and forth and read the end play on the indicator. Factory spec is .002 to .005 end play. Add or remove shims as required to obtain the desired end play.

Position the front wheel drive shift rod so it will allow the shift rod interlocks to enter the detents in the rod. This will allow the low range shift rod to be installed in the housing.

Put the low range shift rod part way into the case. Put the low range shift fork and gear in the case with the teeth facing forward. Push the shift rod into the case and through the fork until the rod is lined up with the shift fork bolt. Replace the bolt and tighten to 15 ft. lbs. Be sure to replace the safety wire or use LocTite.

Assemble the rear output housing using the shims provided. You are seeking to achieve .003" - .006" of endplay in the output bearings. This can be set up in the transfer case, or on a vice or other sturdy fixture. Once completed, it can be installed onto the back of the center of the transfer case, slipping the output shaft's 15 spline hub into the gear that is sitting the case.

Important Considerations for the Novak O-ring Seals

When installing the Novak intermediate shaft, install the leading o-ring after the shaft has entered the rear bore and then apply a coat of grease to ease its installation into its own bore at the front of the transfer case. Install the second o-ring and grease it as well. This is to minimize the risk of damaging the o-ring seal during this installation process.

Uncaged rollers (quantity 48) and spacers (quantity 3) used with the 1-1/4" shaft are best retained in the gear bore with frozen petroleum jelly or Smart Blend Synthetic Assembly Lubricant #5500. The thrust washers can be "glued" to the faces of the gear with this method also. The gear, rollers, spacers, and thrust washers can be easily positioned in the case to accept the intermediate shaft which is installed from the rear of the case, tapped into position, and safetied with the lock plate and bolt. (Note that this gear and shaft may be removed from the transfer case for service while the case is in the vehicle. This is easily accomplished by removing the bottom cover [oil pan] from the transfer case.) Never mix old and new bearing rollers. There is enough difference in size to cause the new rollers to carry a greater portion of the load. This will cause premature failure of all the rollers.

Sealing it Up

On the following steps involving gaskets, choose your preferred RTV (we like the Right Stuff - RTV posing as a can of CheezWhiz™ at your auto parts house...). Lay down only a thin layer of silicone on each side of the gasket. Solvent clean the steel metal mating surfaces to remove any oil. Tighten the bolts by hand just enough to barely start to squeeze the RTV. Wait several hours and then tighten slightly more.

Replace the rear output section using a new gasket and a thin layer of RTV. Torque the five bolts until the silicone just starts to squeeze out. Allow to cure. The torque to 30 ft. lbs.

Replace the shift rod cover cups (or "thimbles") on the rear of the case. Use a minimal amount of RTV on the mating surface and tap into case about 3/8".

Replace the bottom cover (oil pan) using a new gasket. Install the bolts using a tiny wrench and minimal force. Overtightening of the bolts is too common, and results in cover warpage and leakage. Torque bolts to no more than 15 ft. lbs.

Install new output yoke oil seals and install yokes. Torque the yoke nuts to 175 ft. lbs.

Check unit for freedom, smoothness and quietness in all modes and ranges by hand turning.

Enjoy your improved Jeep.