The new all-wheel-drive control system has been developed to improve stability, handling performance and safety under various road/operating conditions. This system consists of center differential and hydraulic transfer clutch which is electronically controlled according to road/operating condition.The center differential of this control system is in the form of composite planetary gear system without a starter ring. The output torque of transmission is distributed by this center differential 35% to front wheels and 65% to the rear wheels. It improves handling performance on dry road when the transfer clutch is open. On the other hand, when the slippery road condition is detected or motion of vehicle is disturbed, the actual torque distribution is modified by electronically controlled transfer clutch to improve stability and safety.In the estimation of the coefficient of road friction (μ), lateral stiffness of tire is identified with parameter identification law of adaptive control theory. This logic is based on the linearized 2-wheels adaptive model of vehicle dynamics. The estimated lateral stiffness of tire is converted into the value of μ to control the transfer clutch. Additionally, this μ estimator is modified by the absolute value of filtered lateral acceleration of vehicle, and response of estimation is improved.The transfer torque is controlled not only according to this estimated μ, but also according to operating conditions of ABS, TCS and VDC and disturbance of vehicle motion.Therefore, stability and handling performance of our production car equipped with this control system has been improved under various road/operating conditions.