The present invention relates to small vehicles such as lawn and garden tractors and more specifically to an oil filter assembly used with the transmissions of such vehicles. The filter assembly is housed within the transmission case to reduce mounting brackets outside the case and minimize the likelihood of insufficient oil supply to the filter, pump and hydraulic system functions. The replaceable oil filter assembly is comprised of a filtering element, a strainer element and a by-pass valve. The by-pass valve is housed within the strainer element and is adapted to direct oil flow through the strainer element, but not the filter element when the oil viscosity is high and only through the filter element when the oil viscosity is low. In this way, the parasitic horsepower loss caused by routing oil through the strainer element at all times is eliminated.