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2000 Chevy: Z71..Silverado..GM..the transfer case being stuck

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I have a 2000 Chevy Z71 Silverado with a 4L60E transmission and NP246 GM transfer case. We have had several issues trying to resolve problems with the transfer case being stuck in the "4 hi" position. We are trying to replace the "Encoder Motor" but the slot on the encoder motor does not line up with the key/shift lever on the transfer case. How do you align the key and the slot so you can install the encoder motor. The room to work with is very small and cannot be moved enough to align with the key. Any suggestions as what seemed like a simple job has become very frustrating. Any assistance would be most appreciated.

Have you removed the driveshaft and the transfer case sheild? If not you need to to gain the space needed. I am sure you removed the shield, but ntoeveryones knows the driveshaft has to come out. Here is the installation instructions. Good luck!

Object Number: 804163  Size: SH


If the motor/encoder assembly is being replaced because it is defective, make sure that the transfer case is in the neutral position. Manually shift the unit at the shift shaft. Use a crescent wrench if necessary.
When installing the motor/encoder unit to the transfer case, make sure that the transfer case is indexed properly and it is flat against the transfer case before tightening the mounting bolts.


  • Install the NEW motor/encoder gasket to the transfer case.
  • Install the motor/encoder to the transfer case.

    Notice: Use the correct fastener in the correct location. Replacement fasteners must be the correct part number for that application. Fasteners requiring replacement or fasteners requiring the use of thread locking compound or sealant are identified in the service procedure. Do not use paints, lubricants, or corrosion inhibitors on fasteners or fastener joint surfaces unless specified. These coatings affect fastener torque and joint clamping force and may damage the fastener. Use the correct tightening sequence and specifications when installing fasteners in order to avoid damage to parts and systems.

  • Install motor/encoder mounting bolts.

    Tighten the bolts, in the sequence shown, to 20 N·m (15 lb ft).

    Object Number: 715660  Size: SH
  • Install the motor/encoder electrical connector. Ensure that the retention clips activate.
  • Install the front propeller shaft.
  • Install the transfer case shield.
  • Customer: replied 9 years ago.
    Reply to carhelp4uhere's Post: The encoder motor installation instructions were no help. We have removed the transfer case from the vehicle and are still unable to install the encoder motor. Moving the transfer case to the neutral position (straight up and down or 12:00 oclock position)at the shift shaft makes the situation worse. The key/slot on the encoder motor is such that in order to install the motor over the transfer case shift shaft, the shaft needs to be in the 02:00 oclock position which is almost imposible to attain. Is there a way to move the encoder motor key slot so it will align with the neutral transfercase setting? Also, can you tell me where the settings on the shift shaft for 2hi, 4hi, 4lo and AWD by the positions on the clock? Sorry for the bother but still having quite a time here.
    I understand your dilemma. I have not had this problem before, and I do not have the info for what position the shift shaft needs to be in as you are asking. Honestly, I have replaced quite a few of these and the shaft could be moved to where I needed it. I will opt out and keep hunting. If I can find the info, I will let you know asap. I am opting out to let other experts answer also. Thanks for your patience.
    Carhelp4u and 10 other Car Specialists are ready to help you
    Customer: replied 9 years ago.
    If there is someone who is familiar with my situation as described above, I would very much appreaciate hearing from you. Thank you,
    I have contacted a couple guys on here who specialize in gm stuff and no one has seen this. have you verified that the motor is correct for your application?
    Customer: replied 9 years ago.
    Yes we have verified that the encoder motor is correct. We also looked at the encoder motor that is suspected bad and it has key/slot in a similar position (2 oclock). So what you are inferring is that if I have the correct encoder motor for this vehicle, the key/slot should be aligned so that it will fit over the transfer case shift shaft in the neutral position (12 oclock) or straight up and down? I also would still like to know what the positions on the transfer case shift shaft are for 2hi, 4hi, 4lo and AWD if possible. Any help would be most appreciated.