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It could be axle bearings, however it is more likely a pinion or carrier bearing since you say the noise seems to be coming from the differential housing. With the vehicle up on a lift around 45 mph, use a mechanic's stethoscope to help pinpoint the noise. You should be able to at least determine if is coming from the axle bearing or the differential, sometimes you can tell if it is a pinion bearing (noise more pronounced near the driveshaft) or if is a carrier bearing (more pronounced near the rear cover).

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Q: What would cause a grinding noise from the rear-end of a 1997 Mustang GT It sounds as if it is coming from the differential housing but could it be the axle bearings in the rear-end?
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