Due to strict government legislation around the world to control carbon dioxide (CO2) emissions and their detrimental effects on climate change, improving fuel economy has become a major consideration in vehicle design. Original Equipment Manufacturers (OEMs) have started using lower viscosity oils as engine, transmission and axle lubricants. For example, North American heavy duty OEMs started moving away from high viscosity SAE 75W-140 axle oils in the past decade, and now most OEMs use lower viscosity SAE 75W-90 as fuel efficient axle oils. OEMs also demanded an extended drain interval to address their customer’s needs. These trends forced the lubricant industries to use Group III and/or Group IV base oils in axle oils. Group II base oils have higher traction coefficients in comparison to group III and group IV base oils. Higher traction can lead to higher operating temperatures, which can impact fuel economy and oxidation performances of axle oils. Group II base oil can also have insufficient low temperature properties when compared to higher group oils. In this study, we developed a novel lower viscosity 75W-85 axle technology, which challenged a conventional wisdom of not using Group II base oils in fuel efficient axle oils. The work detailed in this paper introduces combinations of carefully selected viscosity modifiers (VMs) with base oils to lower the traction coefficients and improve oxidative performance as well as improving lower temperature properties. This new technology has been validated with key industry performance tests, including GL-5 and MT-1 tests. Further validation is in-progress in a field trial. The development of fuel efficient axle oils utilizing Chevron Group II base oils will provide a cost-optimized solution for the market and address a supply issue and high cost associated with Group IV base oils.