Due to U. S. Army depot inspection hardware limitations and the Army goal to overhaul equipment in the most efficient and cost-effective manner, the U. S. Army Tank-Automotive Command (TACOM) in conjunction with Tooele Army Depot (TEAD) and Mechanical Technology, Inc. (MTI), initiated a program to develop a transmission and transfer case production inspection test system. The test system was to be designed for both final acceptance inspection and preoverhaul testing to identify internal component quality and wear levels. The system design included automatic evaluation of characteristic vibration frequencies, both from the gear meshes and bearings, and the transient vibration response measured during gear shift operation. Because of the request by depot personnel to minimize test preparation time, a noncontact sensing approach, utilizing laser vibration measurement, was selected for use by the inspection system. The equipment nomenclature was, therefore, defined as the Laser Vibration Sensor Inspection Test System (LVS/ITS). The development program was then laid out to maximize depot personnel involvement during the LVS/ITS design definition phase and to fully utilize the depot personnel's knowledge on the most common failure mechanisms of transmissions and transfer cases. Phase I of the LVS/ITS development program successfully verified the feasibility of, and defined dual technologies for, gear box diagnostic/prognostic test logic and the Laser Vibration Inspection System design specifications.