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Recent developments in front wheel drive based all-wheel drive (AWD) systems have focused on the disconnection of the secondary driveline to provide a high efficient 2-Wheel Drive (2WD) mode in order to minimize parasitic losses and increase fuel economy when all-wheel drive is not required. This present study compares a base on-demand all-wheel drive system without disconnect features to one with disconnect features in the rear drive module (RDM) and power transfer unit (PTU) to fully disconnect the secondary drive line. In order to further reduce parasitic losses the RDM also utilized an on-demand lubrication system. In conjunction with the active lubrication system, the oil sump level was reduced to assure all clutch housings and their associated plates were above the oil level at all times in order to minimize shear losses. Positive plate separation was also employed to assure ample clearance for free-running clutch plates.