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Hydrostatic torque modulation is a new, at moment theoretical approach, to developing advanced AWD4WD transmissions. The basic component is a rotational hydrostatic modulator. It is derived from a low-speed high-torque hydrostatic machine. As such, it can be integrated into a standard mechanical AWD4WD transmission as a replacement for the clutch, where torque is controlled through energy dissipation. Controlled by a simple solenoid valve, it provides torque vectoring with a reaction time shorter than 0.5 s, and it provides additional safety features that result in a more robust AWD4WD transmission. As it can modulate torque with energy flow control/transfer, it offers much more than existing systems based on controlled clutches. Specifically, hydrostatic torque modulation, when it is integrated into the AWD4WD transmission, brings CVT or ICT performance.