A power transfer system for a four-wheel drive vehicle having a full-time transfer case with its input angled relative to its outputs by means of a constant velocity (CV) universal joint. More specifically, the transfer case input includes a first rotary member adapted to be rotatably driven about the rotary axis of the transmission output shaft, a second rotary member supported for rotation about a second rotary axis that is angled relative to the first rotary axis, and a CV joint interconnecting the first and second rotary members. The transfer case outputs include a pair of rotary output members supported for relative rotation about a common third rotary axis that is offset from the second rotary axis. A torque transfer arrangement is provided for transferring torque from the transfer case input to its outputs. The CV joint allows the transfer case to be angulated so that reduced departure angles are achieved with respect to the prop shaft connections. The full-time transfer case includes a two-speed reduction apparatus, and interaxle differential, a lock-out clutch, and a shift arrangement for permitting the vehicle operator to select operation in various drive modes.