The study of energy losses in disengaged wet clutches is important to efforts to maximize the efficiency of automatic transmissions. This paper describes a simple, accurate method of investigating clutch drag using the SAE #2 machine. By recording coast down speed versus time with known inertia, average and instantaneous torques can be calculated. Bearing and component losses can also be identified by running empty and partially built clutches. Many individual variables can be studied under laboratory controlled conditions. Friction plate geometry, surface finish, groove design, and plate flatness are evaluated at various levels of pack clearance, oil flow, oil level, and temperature. The influence of clutch speed on the magnitude of power loss is also shown. Results are analyzed to demonstrate the relative contribution of each factor. Conclusions are drawn to maximize effectiveness of effort to reduce power loss.