AW4 is extremely durable. Most 'transmission' problems are TPS, NSS, TCU fault codes, or governor pressure issues - not actual mechanical failure.
The AW4 is among the most durable automatic transmissions ever made; most 'transmission problems' on an XJ are external. Diagnose in this order. Hard 1-2 shift or no 3-4 shift: check Throttle Position Sensor (the TCU uses TPS for shift firmness). No reverse but forward works: check NSS adjustment and shifter cable. Slipping under load: check fluid level hot and on flat ground; AW4 dipstick has both HOT and COLD ranges. No torque converter lockup: check the brake switch (TCU disables TCC if brake switch reads stuck-on). To pull AW4 TCU codes (1991-1995 with separate TCU), short specific pins on the diagnostic connector or watch the Power/Economy light flash patterns. The 1997+ XJ TCU is integrated with PCM and codes pull via standard OBD-II. Filter and pan-drop service (see maintenance entry) cures many hard shifts that are blamed on the transmission. Internal failures (a real burnt-clutch failure) typically happen after a fluid heat event - towing without aux cooler, getting stuck in low gear at highway speed.
Written and maintained by an AZ wheeler and driveway wrencher. Always cross-reference your factory service manual — modifications affect vehicle safety and warranty. Work at your own risk.