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The vent hose is for either the transfer case breather or the transmission breather. A light amount of oil residue is normal. If there is a lot of fluid coming out of the hose then it is most likely caused from the transmission getting too hot.

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Q: There is a vent hose from the engine that runs underneath the truck on top of the transmission on my 2002 Chevy Avalanche can you tell me what this is It has some oil residue in that area?
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