A new compact five-speed automatic transmission (A650E) has been developed for front engine rear wheel drive cars. The development of this transmission has been aimed at improving fuel consumption, power performance, engine noise reduction during highway cruising and smooth acceleration by employing a wide range of gearing and close gear ratios. Generally a five-speed automatic transmission is larger than a four-speed, because of additional friction elements and gears. This can result in a change in the floor panel of the car body. However, by removing a one-way clutch for second gear and employing a unique gear-train layout, this transmission has the same circumference and length as the conventional four-speed automatic transmission (A340E)(1).1 In order to reduce first or second gear noise, gear specification and supporting structures of planetary gears have been optimized by FEM analysis. Shift clutches and a torque converter clutch have been controlled by linear solenoid valves in cooperation with the engine control system achieving smooth shift and acceleration feeling. Moreover, it is possible to adopt the switch shift system on the steering wheel, through improvements in shift response of the electronic hydraulic control system. This paper describes the major features and performance of this transmission in detail.