In an automotive power train system, the differential gear system plays a vital role of enabling the vehicle to transfer the engine torque to the wheels. The differential system consists of complex system of gears which are meshed with each other. Effective lubrication of the differential system ensures that the metal to metal contact between the gears is avoided. In addition, the lubricants also acts as a thermal medium to effectively dissipate the heat produced due to frictional resistances. For dipped lubrication system, the use of lubrication oil leads to a loss of transmission power, and the loss increases with increasing rotational speeds.Prediction and an understanding of the transmission loss inside the differential system is important as it provides a means to increase the power transmission efficiency. In addition, it provides insights to optimize the lubrication methods, gear profile, and gear housings.In this study, the load-independent power losses of an automotive differential system operating under dip-lubrication conditions is investigated using Multiphase Computational Fluid Dynamics analysis with the Volume of Fluid approach. The investigation is conducted for a differential system filled with lubrication oil up to the center level of the ring gear and for the case with gear blanks without teeth to compare the results and formulate the spin power losses.The results from this investigations show total power consumption by the differential system and the lubrication flow characteristics. Power estimated in dip oil lubrication case is compared with no oil case to assess the additional power requisite due to drag offered by oil. Difference in total power consumption for the differential system with family of blank gears as compared to later case is caused by the spin power loss due to the actual differential system. Since both air and lubrication oil interaction with gears captured during the unsteady state CFD simulation, the power loss due to air windage, and oil churning losses are accounted. Estimating the power losses generated by a differential system in advance during the design step allows saving time and money normally needed in order to realize prototype and to test them. Furthermore, the information about the internal fluid dynamics of the differential system should help the designers in the optimization of not only the lubrication but also the heat dissipation.