Abstract: A system for venting air from an automatic transmission clutch piston cavity includes a piston positioned in a piston cavity. The piston is slidably disposed to engage a clutch. A lip seal is seated in a seal groove of the piston. The lip seal includes: a body of a resilient material; multiple slots preformed about an outer perimeter of the body, each of the slots opening outwardly from an outer perimeter surface of the lip seal; and an angular spacing separating successive ones of the slots. Air within the piston cavity is vented through the multiple slots by application of a pressurized fluid against the lip seal.