1992 Ford Mustang. Transmission will not stay in overdrive mode, but will operate ok in drive

is the transmission not shifting at all or just not shifting into overdrive.... ???
not at all... find a good transmission shop
not into overdrive... find a good manual

Check detent cable adjustment at throttle body.

Visit a good trans repair shop

Check transmission fluid level and add if necessary.

I had/have both of these problems with my '92 Explorer. They were unrelated. My overdrive problem
required a transmission rebuild. My four wheel drive not working is apparently a problem with the
computer which is hidden behind the left rear quaterpanel (in the jack compartment). Your four wheel
drive problem could be as simple as a blown fuse. There are 2 fuses for the four wheel drive system.
One inside under the dash and another higher amp fuse under the hood on the battery side. Or it
could be the more expensive problem like my computer problem or the engagement motor needing
rebuilt. The computer has a diagnostic mode that you can access by pressing the little square white
button on the underside of it with the key turned on but the motor not running. If the little red light
next to the button stays on, then the computer is bad. If the light flashes, the engagement motor is
bad.

There is a problem with the automatic transmission. Got to get it scanned to pull out the transmission codes.

well the low cost way to go first would be to try and change the trans fluids. If the problems still remains the it may be an internal problem

have someone scan it for transmission codes. Most likely it is your Torque Converter that is going out, but it could be a solenoid, What color was your fluid?

The service light is a reminder for you to have the car serviced, it can be reset, and it will come on again in 5,000 miles or so.

The overdrive light may be caused by the wiring to the overdrive solenoid on the transmission, or the relay. Just be sure the wiring is ok before replacing the relay, or you can damage the new relay.

Bret
RepairPal.com

Sounds like the shift kit is warn out in the transmission. The overdrive line may not be able to provide enough hydrolic pressure to engage the gears to move the truck. When you switch to regualr drive, that line is able to build the hydrolic pressure to engage the gears. At a certian speed (for the transmission, certian hydrolic pressure) there is enough pressure to engage the gears in overdrive, but go below that, and you have to start in drive again. If this is the case, there is no easy fix for that and I recomend taking it to a transmission shop to have your shift kit examined. Opening up an automatic transmission requires specalized tools, clean shop enviroment, and knowlage more then the average back yard machanic has.