The differential transfers the engine power at the wheels, reduces gear ratio from the transmission (via the transfer case), transmits the power to the wheels through the axle while allowing them to rotate at different speeds. The basic concept revolves around the fact that when turning, inner wheels travel faster than outer wheels since they travel a shorter distance and that front wheels travel at a different speed than rear wheels. On the Defender, all four wheels are linked together so that the engine and transmission turn both front and rear wheels at all time. In addition, front and rear differentials can be locked all together so that the front and rear wheels travel at the same speed with the transfer case acting as one large differential (and gear selector) for both front and rear differential.

Clearly, the differential plays a very important role without which your Defender would skid and slip when in a turn. Because of the gear reduction role the differential plays, it is always subject to immense amounts of load, converted to wheels, and creating heat in the process. Defender's stock two pin differentials may be upgraded for those planning to offroad regularly since they are not particularly strong and can fail very quickly when wheel spinning due to shearing of the pins. Four pin, limited slip, or locking type differential upgrades are available specifically to address this issue from a number of reputable vendors.

Selecting the right oil for the differential is key to assuring a long lifespan for all those gears handling heavy loads inside the differential box, driving the front and rear axles and turning front and rear wheels. The oil recommended for both front and rear differential on the Defender is EP80/90. Refer to Oil Lubricant Chart under specifications for more information.

Differential oil leak may occur due to bad pinion seal, differential-to-axle gasket, or bearing retainer gasket. A leak at the pinion seal, the most common type of differential leak, maybe detected easily by tracing the leak starting at the pinion as shown above.