The transmission is a device that is connected to the back of the engine (grey) and sends the power from the engine to the drive wheels. An automobile engine runs at its best at a certain RPM (Revolutions Per Minute) and it is the transmission's job to make sure that the power is delivered to the wheels while keeping the engine within that range. It does this through various gear combinations. In first gear, the engine turns much faster in relation to the drive wheels, while in high gear the engine is cruising even though the car may be going in excess of 70 MPH. In addition to the various forward gears, a transmission also has a neutral position which disconnects the engine from the drive wheels, and reverse, which causes the drive wheels to turn in the opposite direction allowing you to back up. Finally, there is the Park position. In this position, a latch mechanism (not unlike a deadbolt lock on a door) is inserted into a slot in the output shaft to lock the drive wheels and keep them from turning, thereby preventing the vehicle from rolling.

There are two basic types of automatic transmissions based on whether the vehicle is rear wheel drive or front wheel drive.

On a rear wheel drive car, the transmission (orange) is usually mounted to the back of the engine (grey) and is located under the hump in the center of the floorboard alongside the gas pedal position. A drive shaft (blue) connects the rear of the transmission to the final drive which is located in the rear axle and is used to send power to the rear wheels. Power flow on this system is simple and straight forward going from the engine, through the torque converter (green), then through the transmission and drive shaft until it reaches the final drive where it is split and sent to the two rear wheels.

On a front wheel drive car, the transmission is usually combined with the final drive (blue) to form what is called a transaxle (orange). The engine (grey) on a front wheel drive car is usually mounted sideways in the car with the transaxle tucked under it on the side of the engine facing the rear of the car. Front axles are connected directly to the transaxle and provide power to the front wheels. In this example, power flows from the engine, through the torque converter (green) to a large chain that sends the power through a 180 degree turn to the transmission that is along side the engine. From there, the power is routed through the transmission to the final drive where it is split and sent to the two front wheels through the drive axles.

There are a number of other arrangements including front drive vehicles where the engine is mounted front to back instead of sideways and there are other systems that drive all four wheels but the two systems described here are by far the most popular. A much less popular rear drive arrangement has the transmission mounted directly to the final drive at the rear and is connected by a drive shaft to the torque converter which is still mounted on the engine. This system is found on the new Corvette and is used in order to balance the weight evenly between the front and rear wheels for improved performance and handling. Another rear drive system mounts everything, the engine, transmission and final drive in the rear. This rear engine arrangement is popular on the Porsche.