Abstract: A fluid level control system is disclosed which uses pressurized air from a turbocharged engine to regulate the level of fluid in an axle assembly and for returning excess fluid from the axle assembly to a transmission case. The system includes a fluid supply line and a fluid return line connecting the transmission case to the axle assembly. A pump is positioned across the fluid supply line to supply pressurized fluid to a hydraulic actuator which is located within the axle assembly. The hydraulic actuator, such as a clutch for a differential, is susceptible to leaking fluid which can raise the fluid level in the axle assembly. A standpipe is positioned within the axle assembly and has a first end connected to the return line and a second open end located approximately even with a predetermined static fluid level.