One problem related to transfer case has been reported for the 2016 GMC Yukon. The most recently reported issues are listed below. Please also check out the statistics and reliability analysis of the 2016 GMC Yukon based on all problems reported for the 2016 Yukon.
On 11/13/15, "service 4wd system" message appeared on the screen rendering the vehicle unsafe to drive. This issue occurred less than a week after purchase (297 miles on the odometer at the time that the issue occurred). Specific issue: when the transfer case was set to "auto" it automatically switched to the "4wdlo" setting, which caused the vehicle to lock-up specifically when turning or in reverse gear. I had the vehicle towed to dealer and was told that the transfer case control module software needed to be updated / reflashed and that the encoder motor / actuator needed to be replaced. The dealer contacted gm and was notified that the encoder motor / actuator was on national backorder. The dealer received and installed the part on 12/8/15 (25 days after the issue occurred). I formally submitted a complaint to gm on 11/20/15 (ref # 8-1674527570) so they are aware of the issue.