The differential is responsible for distributing power from the transmission to the wheels of your vehicle. Because differentials control the amount of torque sent to the drive wheels of your car, they produce a substantial amount of pressure, heat, and friction. This combination of pressure, heat, and friction causes the additives in differential fluid to gradually breakdown. As the fluid breaks down, small metal gear shavings and clutch material begin to break away. These impurities mix with the deteriorating fluid. Water is also a common contaminant of differential fluid.