This transmission o-ring seals the interface between the gearbox housing and the shaft or cover it fits against. It prevents lubricant from leaking past the joint and keeps contaminants from entering the transmission. A degraded o-ring causes oil seepage that can lead to low fluid level and eventual gear damage. This part is manufactured to the original cross-section profile and material durometer, so it seats correctly in the groove without being over-compressed or under-compressed. On reinstall, clean the groove thoroughly and apply a light coat of transmission fluid to the o-ring before fitting.