A method for controlling a coasting downshift in an automatic transmission having a torque converter that includes an impeller driveably connected to an engine and a turbine hydrokinetically coupled to the impeller and driveably connected to the transmission input. During a coast condition, the speed of the turbine decreases, and the speed of the engine decreases to and is maintained at an engine idle speed. After the downshift event begins, the turbine speed increases due a transfer of torque from an off-going transmission control element to an oncoming control element. Engine speed increases steadily until it reaches the target engine speed. The downshift is completed, and engine speed decreases until it again reaches the idle speed.