The function of a transmission modulator valve is to regulate the timing of gears shifting. It works alongside the throttle, which indicates when the vehicle hits a speed that necessitates a gear shift.
An indication of a faulty transmission modulator valve is the inability of an automatic transmission to shift gears. Additionally, the transmission or manifold may begin to smoke.
To replace it, first raise the vehicle with a floor jack, and place jack stands under it for support. Detach the vacuum hose that runs from the valve to the intake manifold. The presence of transmission fluid in the hose confirms that the valve's diaphragm was broken and fluid was travelling to the intake manifold. Remove the transmission modulator valve itself, which is bolted into a bracket. Take care to not lose the actuating rod located near the transmission modulator valve; it is likely to be displaced when the valve is removed.
Put the new transmission modulator valve in its place, and listen for the snapping sound that indicates that the valve's O-ring has sealed successfully. Attach the valve to the bracket, and secure it with bolts before reattaching the vacuum hose between the valve and intake manifold. Remove the jack stands, lower the vehicle, and remove the jack.