One problem related to transfer case has been reported for the 2007 GMC Yukon. The most recently reported issues are listed below. Please also check out the statistics and reliability analysis of the 2007 GMC Yukon based on all problems reported for the 2007 Yukon.
Service 4 wheel drive message came up on instrument panel(dic). Shifting into 4 wheel drive amber light kept flashing denoting transfer shift did not occur,however shift could be felt. Manual clearly states do not shift into gear or damage can occur to tranny. Dealer fixed; got home & same problem . Worked intermittently. At dealers now for 2nd time -gave me loaner car . Found 2 service bulletins same problem on NHTSA web site.