Toyota 0138-10 TSB – Transfer Case Inner Seal – Highlander Sienna Rav4

Do you have an AWD Toyota Highlander, Sienna, or RAV4 leaking ATF or gear oil around the passenger side front wheel?  There’s a fair chance this is the source of your problem. At the time of writing there is very little information available online about this repair besides the TSB itself, which IMO leaves out several key details. I saw some cryptic references to “shortcut” methods posted by alleged Toyota techs… but of course nothing actually useful. So, if you attempt to perform this repair yourself, read on and learn from my mistakes to save yourself some trouble!

Do I really need to drop the engine and transaxle?

No. However, due to the locations of the bolts that attach the RH transfer case support bracket to the engine block, you will have to cut one bolt with a mini hacksaw and replace it with an appropriate-grade stud and nut.

The official Toyota method is to drop the entire engine/transaxle cradle out of the vehicle. As far as I can tell, that is the ONLY way you can get the transfer case detached from the transaxle without cutting any bolts. The lower right bolt on the transfer case RH support bracket cannot be removed unless the transfer case is moved to the left, which requires unbolting the transaxle from the engine.

What’s going on here?

The transfer case is driven by a splined collar attached to the left end of the ring gear carrier. The RH front driveshaft goes through the middle of the collar, and the entire ring gear carrier. Because the front differential is in the transaxle, the ring carrier and driveshaft move completely independently.

Inside the transfer case is gear oil. Inside the transaxle is ATF. However, the RH outer axle bearing is lubricated with ATF, by way of a small passage through the top of the transfer case. So, although the transfer case is full of gear oil, there is ATF in the bearing retainer on the RH side. The part that actually fails–“RH bearing retainer oil seal No. 2” is actually two seals put together back-to-back, centered over a hole for a vent passage. If the inner seal fails, gear oil comes out the vent. If the outer seal fails, ATF comes out the vent.

In the case of my 2006 Highlander, I was losing ATF–but caught it before any permanent damage was done. The leak started during a very cold spell, and I believe the transmission may have been slightly overfilled prior. In hindsight, I wish I would have just added some ATF and waited to see if the problem went away once it got warmer and rubber parts were more pliable. I don’t know if it would have or not, but there was no obvious damage to the seal.

Toyota Transfer Case TSB 0138-10 ATF Leak
ATF leaking out bearing retainer vent (at inner end of slot visible on bottom of retainer casting)






Removal Tricks

  •  Before removing the sway bar end link, wire brush the heck out of the threads and liberally apply penetrating oil. You have to use an allen wrench to hold the stud while turning the nut, which means this has to be done with a combination wrench rather than a ratchet or impact. Stupid design choice on Toyota’s part, IMO. Perhaps less of an issue in areas that don’t salt roads like Iowa.
  • An air impact makes this project significantly easier when removing axle nut, lower ball joint mounting bolts, exhaust, and other brackets.
  • The axle retention nut on my vehicle was a 12-point 30mm. None of my local part stores had this style in their loaner tool inventory, however Napa had a deep well impact socket in stock for a reasonable price.  You’ll need the deep well to get past the axle.
  • When removing the rear driveshaft, you should be able to remove 4 bolts/nuts in front of the first mounting point, then slide front driveshaft forward into transfer case, without removing anything associated with the middle/rear driveshaft sections.
  • Transfer case to transaxle bolts Get your extensions and swivels ready! Some of the bolts that come in from the LH side are accessible through the driver’s side wheel well. Most of the lower ones you can get with a combination wrench (I used a cheater for extra length). The three upper/forward ones are the toughest. A crow foot might work for some, but I had better luck trying different combinations of extensions and swivels until I found something that worked.  In some cases, you may need to use 3/8″ drive rather than 1/2″ to give more clearance. Here’s the setup I used to remove/install the lower of the upper front bolts, going in through the passenger side wheel well. 3/8″ drive socket-swivel-extension, then converted to 1/2″ right before the second swivel to use with my longer breaker bar.2015-03-05 20.19.07
  • Transfer case RH bracket to engine block bolts These are a real treat. This picture shows the bolt locations on the block with the transfer case and bracket removed. There are three bolts that hold the bracket to the engine block–the upper right bolt location is not used.   These bolts are 14mm heads, however are quite tight (Grade 10.9 M10x1.25). I suggest only attempting to remove with a box end wrench or socket. Open end  or crow foot wrenches of that size tend to spread easily and round off the corners.2015-03-13 13.48.12
      • Lower right bolt is pretty straight foward, as it’s actually accessible.
      • Lower left, you’ll probably want to leave alone until you get the transfer case freed from the transaxle–once all those 17mm bolts are out, you can pry on the transfer case slightly to give yourself more clearance.  (You won’t be able to remove this all the way, but get it broke loose.)
      • Upper left. You can see the bolt. You can get a socket on it. But, the transfer case has a casting feature that prevents you from being able to get an extension onto the socket.  And, there’s not enough space around the bolt head to use a wrench of any type. You can *sort of* get certain crowfoot wrenches on there, but due to the tight quarters the crowfoot will hit something before you actually turn the bolt. After fighting this for longer than I care to admit, I eventually got creative. Using a .045″ cutoff wheel in an angle grinder I sliced a 14mm socket in half, then welded it back together offset (picture below). If you make one of these before you start, you’ll save yourself a LOT of grief. Once cooled (and a little bit of filing to get the bolt corners back to the right shape…) this came loose in about 15 seconds. Note that you must have the transfer case loose from the transaxle to have enough clearance to get this bolt all the way out–or put it back in.

        2015-03-06 16.30.22
        Toyota 0138-10 TSB – trick socket for RH bracket upper bolt





 Cut the Evil Bolt

Once the transfer case is unbolted from the transaxle and the two bolts you can actually remove are taken out, you’ll have to cut the lower left bolt before you can completely remove the bracket. I used a compact hacksaw–the kind that is just a handle with hacksaw blade sticking out the end.  I loosened the bolt as far as I felt I could safely (the head will be pushing on the transfer case / bearing retainer), then pulled the bracket away from the block. I was able to fairly easily get the hacksaw between the bracket and the block, so once cut there was minimal protrusion from the bolt and the bracket came out easily.

Once the support bracket is removed, transfer case should drop right out

Hint: At least on the Highlander, you don’t have to remove the harmonic dampener from the back end of the transfer case (black metal and rubber thing attached by 3? small bolts).  You do have to  turn the whole transfer case assembly sideways to get it in/out, though. If you live in a climate with salt, be very careful if you try to remove those dampener bolts, as the steel bolts have likely grown into the aluminum casting nicely and will twist off easily.

Congratulations – your transfer case is removed! (and you’ve done something Toyota says is impossible)

Notes on Procedures in TSB

  • DON’T REPLACE THE BEARING This is listed in the parts for the TSB. I think it’s a better idea to re-use what was there. I’ll explain further shortly…
  • Assess pinion preload before disassembly. Checking pinion preload as described in the TSB requires removing the transfer case housing extension, and using a specialty tool along with a REALLY low value torque wrench. Most halfway affordable pinion torque wrenches don’t even go as low as the 1.3-2.7 in*lb spec, or that’s so low in their range I doubt it would be very accurate anyway.  Torque values are just resistance to rotation, so the hack way to check this is to make a beam and put a weight on it.
    2015-03-06 17.48.09
    Hack pinion preload test: Hose clamp affixing socket to output shaft; 1/4″ ratchet with socket weight.

    While you could do some calculations to actually assess the numerical value of the torque, my objective was simply to make sure it was the same when I finished as it was when I started. I found a socket with an OD that was slightly smaller than the transfer case output shaft, used a hose clamp to loosely attach the two together (remember, we’re only talking 3 in-lb here), and 1/4″ ratchet for my lever. I then hung sockets off the end until I found the transition point between “moves” and “doesn’t move” and made note of which socket that was.

  • I used exactly zero of the described specialty tools. Most spots that it tells you to use a slide hammer, it’s going to be nearly useless  unless you have the special attachments. An air chisel with a hammer bit is my recommended weapon… just use hardwood blocks in between the bit and what you’re hitting to avoid marring anything.
  • To get the bearing retainer off, I started by using the air hammer  with an oak block to rotate the housing back and forth and get a crack started. Once there was enough of a gap to catch, I used a hand chisel and hammer, then as the gap widened believe I eventually switched to large flat screwdrivers.
  • Once the housing is out of the transfer case you need to remove the bearing race and backing washer to get to the seal. The TSB shows pulling directly on the seal. Lacking the “proper” tool, I found it worked best to pry out the old seal first in order to make contact directly with the backing washer. I basically just took a screwdriver and pried the seal toward the center of the housing; once each half of the seal is flipped down into the housing you can take pliers or a pair of screwdrivers and bend them in half so they’ll come out through the hole in the backing washer.
  • As far as I can tell, the sole purpose of the backing washer is to give you something to push against to remove the bearing race. I took a piece of oak about 3/4×3/4×6″, cut an angle on one end of about 70-75 degrees, and rounded the “point”. Then blocked the housing up so there was space below, stuck the oak piece through the axle bearing so it contacted the washer from the back side, and again used the air hammer to tap around a few times until the race was free. (This did “dish” the backing washer slightly; I just hammered it back flat before reinstallation).
  • On mine, the new seal went it very easily. I was concerned about not having a tool for this, but I just used my fingers and had no trouble at all.
  • I would recommend a proper bearing race driver for putting the race back in the housing. This is a standard size, and driver sets are readily available from any auto parts store with loaner tools.

Why Not To Attempt Replacing Bearing

Here’s where you really learn from my mistakes.   The TSB describes every step related to the housing in great detail, but for the ring gear carrier bearing just sort of says “replace the bearing”.   The problem with that is the inner race/rollers are pretty tight on the carrier, and getting that off is not exactly simple.

I first tried to use a slide hammer with a single hook. After sliding off a couple times, I got one good hit in… which yanked the roller cage loose and sent rollers falling into the abyss of the transfer case.

After much cussing and time spent fishing around with a magnet, I eventually found all but one or two of the rollers. I had to take the cover off the side of the transfer case to get that far, though, so now I had much easier access to the inner bearing race.

A few attempts with a hammer and chisel by hand got me nowhere. OK, so I’m in tight quarters, with a piece I don’t care about (inner race) that needs to be hammered loose. Perfect application for an air hammer, right? Well, it probably would have been, had the hammer not slipped off the inner race and nicked the sealing surface on the ring gear carrier. And, to add insult to injury, I didn’t notice it was gouging the surface until I made a second pass at it. Many, many, choice words that this point.

Here are photos of the damage. Note that I did have the inner race removed at this point–ended up heating it with a little MAPP gas torch and then was able to knock it off by hand with hammer and chisel.

2015-03-09 16.31.01 2015-03-09 16.30.02






At that point I turned the transfer case upside down in a drain pan in hopes the last missing roller would make its way out with the help of gravity (it eventually did), and started checking into options.

Turns out having a damaged shaft in an area where a seal needs to ride isn’t an uncommon problem. You can buy repair sleeves of multiple brands that are very thin stainless steel which can be driven onto a shaft and used with the original size seal. However, this particular sealing surface happens to be 37mm. The most popular manufacturer (which it appeared most brands come from the same place) is natively inch measurements. 37mm falls right in the middle of a gap in the product line. I found one company offering a 37mm sleeve for an engine crankshaft application, however it was not wide enough AND had an internal flange that wouldn’t allow it to be driven past the end of the shaft anyway.

So, my attempt to follow the Toyota TSB and replace that bearing ended up costing me $34 for the bearing, plus $330 for a junkyard transfer case. I switched the new seal over to the junkyard transfer case before reassembly. Reused the original bearing in that one, though!


Reassembly is just the reverse of removal–if only it were that easy.

Originally, I put my Highlander back together just using a short bolt in the lower left bracket location. However, in doing so, I neglected to install the upper bolt until after I had torqued down the transfer case to the transaxle. (Once I made my special socket the bolt came out easily, but I failed to consider that the transfer case was already loose at that point.)  Since the ATF passage through the transfer case is sealed with RTV silicone, I either needed to find an alternate plan for that bolt or the transfer case would need to come back out to re-silicone that.

I then left on vacation, project unfinished. While driving on the first day of the trip, I had somewhat of an epiphany. What if I could use a stud, thread it all the way into the block, put the transfer case & bracket in place, and just needed room to get a nut on? Then I could have the correct length bolt of the correct grade, and likely be easier than using a shorter bolt in the first place.

My original idea was to find a set screw of appropriate length to use as a stud.  Grade 10.9 M10x1.25 is not an easy thing to find. Normal metric is either M10x1.50 coarse or M10x1.00 fine; 1.25 pitch is somewhat specific to Asian vehicles. Set screws tend to be very hard, so that should meet or exceed 10.9 grade, and the hex drive would be quite handy for screwing the stud in/out. Unfortunately, long M10x1.25 set screws are even rarer than bolts.

I eventually discovered that the exhaust studs used on these vehicles are the right length, grade, and thread pitch. Dorman makes replacements that are readily available, and they also have 10.9 M10x1.25 flange nuts. Unfortunately, the exhaust studs are threaded separately from each end.

To get something I could screw all the way into the lower hole, I ended up finding a full thread 10.9 bolt and cutting it down.  I was able to get by with the exhaust stud for the upper hole. (Actually probably wouldn’t be too bad to just reuse the original bolt for the upper, but my removal attempts prior the custom socket didn’t leave it in the best condition.)  I cut slots in the end of both studs to allow them to be screwed in/out with a straight blade screwdriver, and went to work.  Getting the bracket in between transfer case and stud in the lower right hole still took a little bit of prying, but overall it went together quite smoothly.  Much better solution than using a short bolt, IMO.

2015-03-26 13.44.24
Original bolt (top) – full thread stud cut from 10.9 bolt – exhaust stud (bottom)
2015-03-26 13.43.15
Screwdriver slot cut in with grinder & thin cutoff wheel










Another reassembly note is the choice of RTV sealant for the ATF passage between the transaxle and transfer case. The sealant listed in the TSB shows as being gear oil resistant. But, it seems far more likely to  me that sealant would encounter ATF than gear oil. I used ATF-specific Permatex. The guy at the parts store seemed to think it was unnecessary and regular black RTV would be fine, but for $7 I didn’t really want to risk it deteriorating and leading to a leak. (FWIW, Permatex MSDS shows different ingredients for the ATF rated stuff.)

I also replaced the seals on both sides of the transfer case / transaxle joint while I had everything apart. Not sure how necessary it was, but they were not particularly expensive even paying full retail at my local Toyota dealer–about $30 total.

Feel free to comment below or drop me an email if anything is unclear or you found this helpful!

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Raised on a family farm in rural Southwest Iowa, I own a mobile DJ business I started as a senior in high school which became a full-time endeavor in 2007. An electrical engineering degree, farming background, and natural curiosity to learn about anything everything make for widely varied interests.

13 thoughts on “Toyota 0138-10 TSB – Transfer Case Inner Seal – Highlander Sienna Rav4”

  1. My 2006 Rav4 automatic developed a leak from a transfer case seal – the one facing a transaxle. Is it possible to change it without doing the full drop-off procedure?

  2. Thanks for posting such good info It helped a great deal, I had the transfer case input seal leaking on my 2008 Highlander. I ordered the seal from Toyota and 2 studs from a local parts store for the repair, after removing the input collar I noticed it had a bad seal groove worn into it. I should replaced it but I needed the car the next day so I set the seal in the housing 3/32″ shallow so the seal was not riding in the same spot and so far it seems to be working, I also modified the bracket by slotting the lower right hole so I could just slip it over the stud(stud was already fitted with the nut and flat washer) this modification was a huge help in the reassembly of the bracket. Thanks again for the great info!!!

  3. Steve,

    Very good description, best I have seen re: transfer case leak that actually proposes a workable solution! You are a wizard for figuring this out. I am going to tackle this on my 06 Rav 4 when it warms up this spring and I am almost certain it is an identical problem. (mine is leaking axle grease vs ATF but I believe it can go either way) I live in the Des Moines area, if you live in the DSM area, is there any chance you might be interested in selling (or renting) me your “trick” socket.


  4. Steve- i really appreciate your work documenting this. I took the repair one step further toward an ‘in-car’ repair. I cut the lower left bolt and loosened the upper bolt allowing the bracket to be rotated around over the top of the transfer case. Then I removed the outer bearing housing, and used a digital depth gage to measure the depth to the bearing race. After using an internal puller , i replaced the seals and put back in the same bearing and shim washer. My depth measure was identical. That assured me that the carrier position and preload should not change. I reassembled the outer housing , had no leaks , and have driven it about 1,000 miles. Very happy now , and Thanks to you.

    1. To clarify, you were able to get the seal replaced without taking the transfer case out of the vehicle, or even taking it loose from the transaxle?? If so, awesome work!

      For the sake of information sharing, what year/model vehicle was this on? Did your vehicle have a locating pin between the block and bracket?

  5. Hey Steve!

    Thanks for this great write up. We own a 04 Sienna XLE Limited AWD. And that dreaded “RH bearing retainer oil seal No. 2” is SHOT, and leaking ATF on the floor through the vent hole. It was a slow leak when we acquired the van back in 2012 with 74k on it. It currently has 118k on it and the ATF leak, has increased from drips to a tiny puddle. Which means for me I need to make time some weekend to attack this job with Fall semester (Senior year in Electrical Engineering!) coming up is gonna be a handful.

    Now I have been under the van and space is very tight and limited. I am inclined to think that the highlander has a tad bit more room to work with. I am going to make an attempt and locate the bracket and bolts that I need to be looking at when going through with the removal. Do you think it would be a wise idea to drop the sub frame, or attempt it as is?

    How important is the bottom vent hole of the transfer case? I am sure welding it shut is not an option. But to delay this job, I want to at-least get rid of the ATF falling onto the exhaust pipe and burning off with smoke.

    Any advice would be greatly appreciated. (If you have more pictures could you PM me those?).

    Thanks again for your write up. At least I am a little relieved I don’t have to go to the dealer to get this done.

    1. I believe the official Toyota procedure is to drop the subframe, separate the transaxle from the engine, and then remove the transfer case from the transaxle. If you have the facilities I don’t think there’s anything wrong with doing it that way… you’ll just have a bunch more stuff to take apart and put back together.

      If you plugged the vent hole to stop it from leaking in the immediate term, I suspect the main risk would be cross contamination between ATF and gear oil. If you’re leaking ATF the risk would probably be with ATF leaking past the second seal into the gear oil of the transfer case. How big of an immediate problem that might cause I couldn’t say, but I’d think with only 118k on your van it would be worth fixing right.

      I’m fairly certain the only reference I found to someone removing/reinstalling the transfer case without dropping the engine/transaxle at the time I did mine was someone working on a Sienna… so I think it can be done.

      If I were to do another one, I’d probably give Vanchuk’s method a shot and see if I could use the trick socket + cutting lower bolt to get the bracket enough out of the way to pull the bearing carrier with the transfer case in the car. It may be difficult to see what you’re really up against on the bracket until you get the driveshaft and exhaust out of the way.

  6. All of Steve’s info helped me do a transfer case replacement in my garage, no dropping of subframe, 2006 Toyota Sienna AWD Limited.

  7. First off, thank you for posting this. Huge help.

    Second, I just wanted to let you know how I got the terrible bolt out. I don’t have access to a welder so cutting and welding a socket was not an option. I tried many frustrating versions before I found success with 1/4″ drive option. The 1/4″ drive extension is narrow enough to get on a 1/4″ drive 14mm 6 point socket. I used a couple 3″ extensions before adding 3/8″ adapter. Then a 1/2″ adapter and 1/2″ universal joint. Finish it off with a 12″ 1/2″ drive extension and breaker bar. I was cringing with every inch I rotated, fully expecting one of the 1/4″ drive pieces to break. When the bolt finally broke free in a burst of violent swinging extensions, I inspected the socket expecting to see the crack along the point of the hex. The socket seemed fine so I reached up to check the bolt and it actually spun freely with just my fingers.

    I know I was lucky. Especially with the amount of rust that has fallen in my face so far. I just wanted to throw out the “no weld” option that worked for me.

    And I’m far from out of the woods on this project. Now I have to cut that stupid bolt…

  8. Hi Steve,

    Thanks again for the detailed info.
    I have a 2006 Sienna and it seems to be leaking from what seems to be the top of the transfer case cover. Could possibly be from the breather vent. There is no seepage from the right axle bearing area.

    My first approach I am thinking about is to drain the diff fluid and refill and keep an eye. In addition thinking about using the ATP AT-205 sealer. It helps seal rubber seals. It has gained some decent reviews on Amazon and also on YouTube. I am thinking it is not going to harm since I already have a leak on the cover.

    Second if I do end up taking the TC out do I just do the transfer case seal and the No 2 & 4 only?

    Thank you

    1. Apologies for the belated response… most of the comments I get are spam and I don’t take time to sift through everything real often…
      I don’t think trying a sealer product would be totally crazy. Gear oil is naturally fairly thick/viscous, though, so I wouldn’t expect too much. I have had some moderate success using K&W Trans-X in ATF to restore/improve operability by swelling/softening rubber seals.

      If you end up pulling the transfer case, I would try pretty hard to make sure you know exactly where it’s leaking (like use some degreaser and then pressure wash everything real good and then look daily to see what gets oily again). As long as you are sure you’re fixing the problem, replacing anything else is purely a judgement call depending on how long you intend to keep the vehicle, how much you want to spend, and you abilities/tools.

  9. Steve, my transfer case is now removed and on the garage floor. I never would have continued with this without your help. I had a 17 and 14mm offset made today and it made things much easier. I do have a few questions for the reinstallation:
    1- did you slather the transfer case bolts in loctite or maybe even anti seize? I’m worried I won’t be able to torque them well enough but also fear ever having to take these off again if I blow it.
    2- did you have any way to try to equate the proper torque for all these bolts? The extensions and swivels render the torque fairly useless I imagine?
    3- I didn’t quite follow why the exhaust studs weren’t winners. If they were also cut and notched for a flat head then wouldn’t the change in threads sit within the holes on the brackets and be a non issue?
    Thanks for any and all help with this! What a process. The head gaskets were almost easier.

  10. My transfer case was dripping atf from the weep hole. I sealed it up with epoxy resin putty 5000 miles ago now. No more stinky burning oil. There is of course risk of atf getting into the transfer case now. But the car is such low value thats its not worth massive amounts of work to fix properly. Will just drain and refill transfer case every so often. Just for reference mine is a RX300 2006 UK Model.

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