Based on the thermoelastic instability theory, the variation trend of film thickness on the surface of transfer case friction pair is studied, and the basic process in which the thickness of lubricating oil film changes due to thermoelastic instability was obtained. According to this process, the critical speed of transfer case friction pair is used to reflect transfer torque stability. Based on above, firstly, the dynamic simulation model of the transfer case is established from which the dynamic characteristic equation of the transfer case under the combined action of asperity torque and viscous torque is obtained. Secondly, according to the result that the thickness of the transfer case lubricating oil film is affected by the joint action of lubricating oil pressure, contact pressure and thermal expansion, the condition of thermoelastic instability of the transfer case torque transmission is discussed. The result shows that the critical speed of the thermoelastic instability increases correspondingly with the increase of the thickness of the oil film. The critical curve divides the engagement process into the stable region at the upper part of the curve and the unstable region at the lower part of the curve, so as to calculate the thermoelastic instability region of the torque transfer of the transfer case. Finally, in order to further analyze the influence of thermoelastic instability on the characteristics of the transfer case, three factors, namely the surface roughness of the friction plate, the lubricating oil viscosity and the thermal conductivity of the dual steel disc, are mainly selected for analysis, and the thermoelastic instability is taken into account. The conclusion is expected to be used in the engineering practice of torque distribution control of the transfer case.