So, I did a little research on the 4L60-E transmission. Before you holler, got to http://en.wikipedia.org/wiki/GM_4L60-E_transmission and see all the applications. At any rate, I found the 4L60 service manual and it confirms my description of it's operation. Yes, in Overdrive Range, TC Lockup is inhibited in gears 2-3 at all times, except for excessive RPMs at high speed, and excessive temps. Also, in the example given by fix_it, the torque convert will not lock up in a lower gear unless one of two extreme conditions exist. The pertinent statements from the service manual are here: http://www.grail-ss.com/GRAIL%20Website%20Files/4L60ETechGuide.pdf pg 59 4 TORQUE CONVERTER CLUTCH RELEASED 4a TCC Solenoid Valve: ACCUM VALVE 3-4 SHIFT VALVE Under normal operating conditions, in Overdrive Range Third Gear, the PCM keeps the normally open TCC solenoid valve de- energized. Converter feed fluid exhausts through the solenoid, and spring force keeps the converter clutch valve in the release position. However, at speeds above approximately 121 km/h (75 mph) the PCM will command TCC apply in third gear. Refer to pages 6263 for more information on TCC apply. pg62a Note: Under normal operating conditions the torque converter clutch is in the released position during first, second and third gears. However, when the transmission fluid temperatures exceed approximately 121°C (250°F), the PCM will apply the torque converter clutch in second and third gears to help reduce fluid temperatures. pg62b The PCM monitors for high TCC slip for most models. Excessive slip is recognized by (DTC) P1870. The transmission must be in hot mode or experiencing a wide open throttle maneuver in order for the TCC to be commanded on in second and third gear. pg64a A forced 4-3 downshift in Overdrive range occurs by increasing the throttle valve angle (percentage of accelerator pedal travel or throttle position) while the vehicle is operating in Fourth gear. A 4-3 downshift can also occur when the vehicle is decelerating during coast conditions or when load on the vehicle is increased. Also, if the TCC is applied in Fourth gear it will release prior to the transmission making a 4-3 downshift. Under normal operat- ing conditions the PCM will keep the converter clutch released in Third gear. The TCC also releases under minimum and heavy throttle conditions.