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I can't tell you what it does, but I can tell you it is a pretty easy fix. I believe the part is in the 10-20 dollar range. The sensor is located on the driver's side rear portion of the transmission. Take it out with a 1 inch wrench (some fluid will run out of the hole. I replaced the sensor the first time the check engine light came on, however the sensor is magnetic and collects any ferrous debris in the Transmission Fluid, and simply cleaning it with a rag worked on subsequent occasions.

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Q: What does the over speed sensor do on a 1997 Jeep Grand Loredo A diagnostics scan says over speed sensor out of range - check engine light occasionally comes on?
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