I found this on another forum. I know its not polite to cross post but Ill leve the forum out of it. I'll cut and paste instead just the text. If you want the full webiste please just PM me. I replaced my sensor last night using these instructions and it was a piece of cake. My encoder motor was full of fluid and Im sure now... after 50 miles its filling back up again. I might have to pull my transfer case to replace a seal... im not sure. But if yours isnt leaking then its a $155 service to your truck. $98 for the sensor $15 for the seal nad about 20 for the transfercase fluid. Plus tax.. ha ha. Im in CA Again, THIS IS NOT MY WRITE UP, I just found it on another site and thought I would share with you. Thanks, Morgan Trotter Temecula,CA I looked around and got the general idea of how to do this procedure because I have had intermittent issues with the 4WD in my 2005 GMC Sierra with the "stellar" auto-trac. So I searched briefly and could not find anyone that did a write-up with pictures or anything. Basically, I was getting the daily SERVICE 4WD message but it would only really act up on occasion. I took it in to get codes pulled about 3 months ago when it just didn't want to make up it's mind for what drive it wanted to be in. They said it was the encoder motor sensor and it would cost 600 of my hard earned loonies to repair. I put it on the back burner since it seemed to go away temporarily. Until Murphy's law kicked in and being the crappiest snowiest day so far, it quit all together. So having it stuck in 2WD on ice and being an hour away from home going down a highway with blowing snow and drifts 2 feet high, of course it would fail. So on the way home, stopped at the friendly local GMC stealership and got the encoder motor sensor and the red rubber gasket for a grand total of around $260 CDN. I parked in the garage and let the old girl sit for a bit to drip dry and melt off most of the ice from the underside. !WARNING! I am by no means a certified mechanic, I am just a guy with a garage full of tools and the ambition to do things myself. I do not trust a lot of the mechanics in my city just because of how some of them do their job, I trust myself because when something goes wrong I can blame myself. Anyway this is what I did: It is recommended that you put the transfer case in neutral to make it easier to align the gears. However I did not have that option since it was stuck in 2WD. (always use that parking brake!!) Jack the front end of the truck up and support it with stands so you can safely roll around underneath it. Remove the 4 transfer case skid-plate bolts. I used a 15mm socket with an impact. Set that skid-plate aside and if possible, hose it off because you know there's mud on the top side. Get ready to drop the front driveshaft, on the yoke entering the transfer case, there is a rubber dust boot with 2 clamps. Remove the one closest to the transfer case and set aside. If you're careful and crafty you can reuse it. On the front yoke, mark the shaft's location with a paint pen (I prefer everything goes exactly where it was) and grab a 7/16" socket and undo the 4 U-joint retainer bolts. Now push the driveshaft towards the transfer case until the U-joint clears the yoke, and lower it. Pull the driveshaft forward a bit only until you can see the spline on the transfer case. Then mark it's alignment with the paint pen. Once you do that you can pull it right off and set it aside. **If your transfer case was in 2WD like mine, the front driveshaft will spin when trying to remove the retainer bolts. I used a chain-grip to hold it steady** Now that the driveshaft is out of the way, you can remove the encoder motor assembly. (At this point if you aren't sure what the encoder motor looks like, consult google) The encoder motor's wiring connector is kind of tucked up towards the top of the transfer case, and it's a doosey. If you can grab it, tug on it a bit and the connection will come free of the retainer and you'll be able to access it better. It's a stupid connector where you have to remove the grey clip and then undo it. Now that it's unhooked there are three 15mm bolts holding it to the transfer case. They're in there with loc-tite so I used and air ratchet to spin them out. You now have the encoder motor, if you haven't priced one out yet, don't drop it. Here is the new sensor and gasket, seems a bit over-priced. Oh wait, I got it at the stealership. So now you can dust and wipe it off to make sure no crap goes inside once you open it up. Clean up the black plastic plate with 4 red holes, cause it gets reused. Mark the location of the gear in correspondence with the case, just because. Lay in on the workbench with the black tube sitting vertical. Undo the 4, and only 4 outside torx screws. The 2 torx screws in the "middle" stay to keep the motor's black plastic cover in place. When you open it, there are two metal spacers that go on top of each gear, if they aren't on top of the gears carefully look on the inside of the case lid, they're probably stuck there. Mark the location of the big gear with the little gear before you move anything, this is crucial. Now you can remove the big gear, lift it straight up a bit, and unplug the 3 wired connector from the encoder motor sensor. Once separated from the case, the sensor just slips onto the gear, poke a screwdriver through the gear holes and get the sensor off. You now hold the very reason you can't happily operate in 4WD, isn't it sad? I opened my sensor up and found the reason it wasn't working, it looks like something had fallen loose inside and scratched up the important side of the sensor. A few microns of missing epoxy is the reason for a one hour white knuckle ride through deep snow. Anyway, place it on the gear, careful to make sure the stub on the inside of the sensor matches the notch in the gear. It's recommended that you tap the sensor in place very gently with a socket to ensure it's seated. !!When you attach the 3 wire connector to the new sensor, make sure the connector is facing the right way. It says TOP on one side!! The old red rubber gasket just pulls out, and the new one goes in very straight forward. I ran light oil around it on my finger just to make sure it gets a good seal.From there, it's all a matter of putting everything together exactly the way it came apart. Torque Values: - Long torx screws on the encoder motor case 3.38 N·m (30 lb in) - Short torx screws on the encoder motor case 2.25 N·m (20 lb in) - Three mounting bolts for the encoder motor to the transfer case 20 N·m (15 lb ft) If I left anything out, feel free to pipe up. This is my first write up so I'm sorry if it's not that precise.