Transmission fluid is used to lubricate the gears of a vehicle's transmission system to prevent wear and regulate temperatures. Just like the oil, it needs to be changed regularly to do its job. The type of transmission fluid depends on whether a car has manual or automatic transmission, and the make and model of a vehicle can vary the type of transmission fluid needed. The owner's manual will provide guidance as to which type should be used, and it will also have recommendations for when to get the fluid changed.

Manual transmission fluid tends to be less viscous than that used in automatic models because so much of the shifting process is controlled by the driver, which puts less stress on the system. It can be difficult to check the level of transmission fluid in a manual vehicle since they typically do not have dipsticks.

Automatic transmission fluid (ATF) is thicker than that used for vehicles with stick shifts because the system usually operates at higher temperatures. The fluid must reduce most of the friction, but still allow for some so the gears can engage. Originally, there was only one kind of ATF, Type A, but Type F was introduced in the 1950s. More variants appeared on the market as transmission systems grew more complicated and individualized. Now, there is also Dexron III, Mercon, and ATF+3 and +4.

Dexron III is made for General Motors vehicles, and many foreign models use this type as well. The majority of Ford vehicles manufactured between 1980 and 1999 call for Mercon. Often, transmission fluid is labeled as both Dexron III and Mercon, because the standards for both are similar. There is another form of Mercon, Mercon V, which is typically for later model Ford vehicles. Type F is still used for a few newer vehicles, but is most commonly used by cars manufactured prior to 1977. ATF +3 and +4 are used in all Chrysler models - +3 is oil-based while +4 is a synthetic fluid.

There are many transmission fluid variations for automatic and manual vehicles, each designed for specific makes and models, and often a vehicle can only use one type of transmission fluid. The owner's manual will point drivers in the right direction, and it is important to follow the guidelines, as the wrong type could overheat the system or cause other problems.