In recent decades, fuel economy has become a key indicator of an automaker corporate social responsibility and a market differentiation factor, and ultimately it is regulated by government agencies such as EPA through CO2 emissions compliance tests. The light pick-up truck and SUV production share has been increasing in the last few years, being 4-wheel drive capability one of the main features that customers seek. Within the 4-Wheel Drive system, the transfer case has a significant impact to both torque transfer efficiency and parasitic losses. The scope of this paper is to better understand the parasitic losses of a transfer case by the quantification of its individual drag losses by component. At product development phases, one measurement of interest is the system level spin loss which has a target value defined by the automakers, and contribution by component is often neglected if the system has the expected performance. This study summarizes the tests performed on a 2-speed chain driven transfer case, where as a first step, a baseline spin loss measurement was taken, then the chain and sprockets, planetary carrier, and oil pump were removed at different points within the test to quantify their contribution by comparing the results to the initial baseline measurement. Lastly, the transfer case with all its components assembled was tested and spin loss was measured using different oil levels.