One problem related to transfer case has been reported for the 2006 Toyota Highlander. The most recently reported issues are listed below. Please also check out the statistics and reliability analysis of the 2006 Toyota Highlander based on all problems reported for the 2006 Highlander.
Driving on the highway, car broke down and stopped functioning. Took the vehicle to the dealership and was charged $4259. 81 to replace transfer case. After some investigating, I discovered that Toyota had issued a TSB (tc008-07) to replace the right-hand bearing seal that would have prevented this. My car was in service at the dealership multiple times prior while under warranty, and they could have prevented this by replacing the seal.