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In an effort to improve fuel economy for light duty trucks, an initiative was undertaken to reduce frictional losses in rear axle through use of low friction lubricants and novel surface finish on gears while maintaining durability. This paper describes the effect of rear axle lubricants on fuel economy. A laboratory rig was set up using a full size pick-up truck rear axle to measure axle efficiency and lubricant temperature with various SAE 75W-90 and SAE 75W-140 viscosity grade lubricants. Traction coefficients of lubricants were also measured at various temperatures using a laboratory ball and disk contact geometry. An improvement in axle efficiency up to 4.3% was observed over current Ford factory fill SAE 75W-140 lubricant depending on speed, torque and the type of lubricant used. The temperature of the lubricants was also lower than that with the current factory fill. This is important for maintaining bearing life and overall durability of the rear axle.