A motor vehicle powertrain includes a transmission producing multiple speed ratios, and a transfer case including a second input driveably connected to the transmission output, a second output continually driveably connected to a first set of wheels and releasably connected to a second set of wheels, for producing alternately in the transfer case a low speed ratio and a high speed ratio. A mode selector produces a signal representing a desired driving mode. A controller, responsive to the signals produced by the mode selector, controls the transmission to produce alternately the multiple speed ratios of the transmission, and for controls the transfer case to operate alternately in the low speed ratio and high speed ratio that corresponds to the desired driving mode and a current speed ratio produced by the transmission.