Abstract: A two speed planetary gear assembly and double disconnect mechanism for a motor vehicle transfer case or similar device achieves full decoupling of the speed reduction assembly from the power path when either neutral or the high speed gear ratio, typically direct drive, is selected. The double disconnect mechanism includes an axially slidable clutch collar freely rotatably disposed within a correspondingly movable reduction hub which may selectively be translated to engage either a direct drive member or an input to a planetary gear assembly. When the reduction hub is positioned to engage the input of the planetary gear assembly, a gear set on the carrier of the planetary gear assembly engages the reduction hub which drives it and the output member at reduced speed.