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New driveline architectures equipped with torque-biasing devices such as active differentials and active transfer cases have yielded a new generation of on-demand four-wheel-drive vehicles, where the torque distribution between left and right and between front and rear axles can actively be modulated online. This allows one to design active vehicle-control systems that are capable of altering, via electronic control, the behavior of a car dictated from its mechanical layout, e.g., understeering and oversteering characteristics. This paper proposes a control strategy that optimizes vehicle performance while guaranteeing vehicle stability and drivability by actively controlling the transfer case. The performance of the overall control strategy is assessed on both a multibody simulator and an instrumented test vehicle.