Abstract: Methods and systems are described to automatically lock and unlock a front axle disconnect mechanism in an all-wheel drive (AWD) system responsive to driving conditions to reduce parasitic losses and increase fuel efficiency. A control algorithm is described which automatically determines whether the front axle disconnect mechanism should lock or unlock responsive to various sensor readings throughout the vehicle. The sensor readings relate to the driving conditions. Advantageously, the present disclosure automatically decides the best mode for optimum fuel economy while safely responding to driving conditions, and therefore removes the requirement for a driver to select the operating mode.