A torque distribution system for a vehicle permits the transfer of torque between vehicle wheels using a selectively engagable clutch that is hydraulically engaged using hydraulic pressure provided by a hydraulic transmission pump driven by the engine, allowing for enhanced system functionality and reduced part content in comparison with known torque distribution systems. The system may include an “active-on-demand” clutch that is selectively engagable to transfer torque between a front differential and a rear differential (thereby transferring torque from the front wheels to the rear wheels) as well as an electronically-limited slip differential clutch selectively engagable to transfer torque from one front wheel to the other front wheel through the front differential. Utilization of the transmission hydraulic pump allows pressure to be provided to engage the clutch even when the wheels are stationary, i.e., to launch the vehicle.