That's where the vacuum modulator comes in: A rubber diaphragm located inside the modulator housing on the side of the transmission case is referenced to engine vacuum.

The idea of regulating vacuum to an automatic transmission's vacuum modulator is nothing new. Racer's have manually adjusted vacuum by means of a needle valve for years.

First, some history about Mustang transmission operation. Your Mustang's original C4 transmission has two shift control systems—the vacuum modulator (throttle valve) and a kick-down system.

If it's a simple problem like a ruptured servo seal, stuck valve body piston, failed vacuum modulator, or leaking pan gasket, it's an easy fix that doesn't require a complete transmission rebuild.