Improving vehicle fuel economy is a major consideration for original equipment manufacturers (OEMs) and their technology suppliers worldwide as government legislation increasingly limits carbon dioxide emissions. At the same time that automotive OEMs have been driving toward lower viscosity axle oils to improve fuel economy, OEMs have worked to improved durability over an extended drain interval. These challenges have driven the use of API group III and/or API group IV base oils in most factory fill axle oils. This paper details the development of a novel lower viscosity SAE 75W-85 axle technology based on group II base oil that rivals the performance of a PAO-based axle oil and challenges the conventional wisdom of not using group II base oils in fuel efficient axle oils. Key to this development was the combination 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. The performance of this new axle oil technology has been validated in key industry performance tests, including SAE J2360 tests and stressed L-tests, efficiency testing and further field validation is in progress.