A transfer case is a device that allows you to shift between differentials, or gears, in your vehicle while driving around Cincinnati, OH. It does this by enabling the transfer of power from one set of gears to another.
While the transfer case is typically associated with off-road vehicles and trucks, it can be found on most passenger cars as well. The transfer case can also be found in heavy-duty trucks, where it's referred to as an "all-wheel-drive" system.
The transfer case is used in conjunction with two differentials; one front and one rear. When you engage a low gear, the front differential receives power via the transmission, while the rear differential locks up and sends power to both rear wheels.
When you engage a high gear, both differentials disengage, and power is sent to all four wheels via chain-drive systems on each axle, while the axles themselves are stationary.