As vehicle fuel economy continues to grow in importance, the ability to accurately measure the level of parasitic losses on all driveline components is required. A standardized comparison procedure enables manufacturers and suppliers to measure component losses consistently, in addition to offering a reliable process to assess enablers for efficiency improvements. This paper reviews the development of a comprehensive test procedure to measure transfer case speed-dependent parasitic losses at key speed, load, and environmental conditions. This procedure was validated for repeatability considering variations in soak time, temperature measurement positions on the transfer case, and test operating conditions. Additional assessments of spin loss at low ambient temperatures, and the effect of component break-in on spin loss were also conducted. The resultant procedure is proposed as a new SAE J-standard (Surface Vehicle Recommended Practice J2985) for release by the All Wheel Drive (AWD) Standards Committee.This project was undertaken and financially supported by the Transmission Working Group of the United States Council of Automotive Research (USCAR) for the SAE AWD Standards Committee.