The open (standard) differential provides an important function in vehicle dynamics and handling by splitting the applied driveline torque and allowing each wheel or axle to spin at different speeds. This function is necessary to eliminate axle bind-up while negotiating turns. However, it inherently impedes optimal traction and mobility performance by allowing the available torque to be limited by the wheel or axle having the least amount of traction. Loss of traction could result in loss of driveline torque control and a resulting loss of vehicle control. This loss of control could be catastrophic in the case of higher speed maneuvers. The proposed electronically controlled hydraulic limited slip differential solution corrects this problem, seamless to the driver, while maintaining the fundamental open differential function. Furthermore, this system maintains efficient forward motion compared to other solutions that slow the vehicle down while expending valuable energy. A number of other systems available today govern and deprive the driver of the sense of confident unimpeded control while the proposed system maintains it.This paper will provide an overview of design considerations, development and testing of the electro-hydraulic limited slip differential. It will be shown that the optimal solution to this problem is to integrate the limited slip function into the differential and within the transaxle or axle assembly. The proposed design is a replacement for the open differential. Additionally, it provides OEMs with an integrated optimal solution that satisfies manufacturing drivers such as part complexity and weight reduction as well as the end customer.