A transmission relay is usually located in the power distribution box under the hood on the driver’s side of the vehicle. It is responsible for sending signals to the transmission solenoids that enable the automatic transmission to shift into and out of the proper gear.
An automatic transmission has sensors that detect vehicle and engine speed and load to determine the correct shift point. A transmission control module serves as a switchboard for this information passing from the engine and electrical system to the transmission. When the TCM receives a bad signal from a sensor or detects a problem, it shuts down the transmission relay, causing the transmission to go into a default or limp mode, where it is stuck in second gear. The transmission remains in this condition until the problem is resolved.