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Vehicle handling is heavily influenced by the torque distribution to the driving wheels. This work presents a newly developed differential, designed to actively control the driving torque distribution to the wheels. The new device incorporates an electric machine, which can operate either as a motor or generator. A control unit monitors signals from various sources in the vehicle, such as steering angle, yaw acceleration and wheel rotational speed. Then, a control algorithm takes into account the steering angle rate and the vehicle speed in order to determine the suitable difference between output torque values. The handling improvement capabilities are evaluated by simulating in ADAMS/Car the driving behavior of a vehicle equipped with the new differential. The model that has been used to simulate vehicle handling is that of a Formula SAE type racing car.