Transfer Case Encoder
WARNING: This page is about a different car, the 2002 Oldsmobile Bravada. However, it is still accessible from the selected car via links, so may be relevant.
The encoder is mounted to the transfer case motor/encoder assembly and is replaced as an assembly. The encoder converts the sector shaft position into an electrical signal input to the transfer case shift control module. The module can detect the location of the transfer case sector shaft by monitoring the voltage returned on the encoder signal circuit.