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231 Fluid

The transfer case is far less sensitive to the type of fluid used than the AW4 is, but ultimately you'll want to either use ATF-4 or Dex/Merc III as suggested by souske. Many prefer to use Dex/Merc III since it's what it was filled with from the factory, and is what you likely (read: should) be using in your transmission... Some fear cross-contamination between the T-case and transmission, and prefer to use the same fluid in both.

That being said, I'm running ATF-4 in mine, whilst still running Dex/Merc III in my transmission. The transfer case is extremely simple and doesn't have any components that are sensitive to the use of ATF-4, so you can feel free to use either.
 
Dex III is fine with me. I'm going to service my AW4 next so I can just get all the same then.

Matching the fluid just makes plain good sense.

FYI--there are no clutches, brakes, or hydraulic valve bodies in the transfer case--you COULD, in a pinch, use any ATF fluid.
 
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