The C4 three-speed automatic is the most common transmission used in vintage Mustangs. Known as the Cruise-O-Matic from '64-1/2-'66 and Select-Shift from '67-'82, this simple hydraulic slush box, of course, has been passed up by more advanced technology in recent years with overdrive automatics like the AOD, AODE (4R70W), and 5R55W. However, it hasn't been forgotten because nothing beats the C4 for simplicity and dependability if you take care of preventative maintenance.
Produced at Ford's Sharonville, Ohio, transmission plant, the C4 Dual-Range Cruise-O-Matic was introduced at the beginning of the '64 model year. It was described as "Dual Range" because the C4 had two driving modes in those first two years-place the shifter at the "Large Dot" with a detent for normal 1-2-3 upshifts or the "Small Dot" without detent for starting out and driving only in second gear. Beginning in '67, Ford redesigned the C4's valve body for the more common P-R-N-D-2-1 performance. If you needed to start out in second gear on snow and ice, all you had to do was place the selector in "2" and gently apply the throttle instead of wondering where to place the shifter. The dot approach created a lot of confusion and transmission failure because some drivers didn't always know which "dot" (mode) to drive in. Some folks never got out of second gear.
The only maintenance C4 transmissions ever need between rebuilds is clean fluid, a fresh filter, and band adjustment every 30,000 miles or every three years. Sometimes, vacuum modulators and kick-down linkages need adjustment, but rarely. Band adjustment is needed because friction material wears off and the bands stretch from heat and use. Kick-down adjustment is required only if shift programming isn't what it should be. Vacuum modulators virtually never need adjustment except when a new one is installed. Most vacuum modulators last the life of the transmission and never need replacement. They fail when their diaphragms rupture, which sucks transmission fluid into the engine, causing white tailpipe smoke and an unexplained loss of transmission fluid.
In the old days, Ford specified the use of Type F automatic transmission for seal, clutch, and band compatibility in its transmissions. These days, Type F (ESW-M2C33-F) isn't mandatory because Ford stopped specifying its use in 1977 with the advent of more advanced friction materials. As older Ford transmissions have been rebuilt and had clutches and bands replaced, the use of Type F has been less of a concern though it remains desirable. Think of Type F as a stickier fluid, with friction modifiers that provide firm clutch and band engagement, which also means longer service life.
It is generally suggested you use Mercon V synthetic transmission fluid if Type F cannot be found. Mercon V is compatible with all kinds of automatic transmission fluid types according to sources we've consulted. Your transmission fluid's job, aside from the obvious for hydraulic control system function, is to cool and lubricate as it travels throughout your transmission. A C4's moving parts generate a tremendous amount of heat, which is why clean fluid and abundant cooling capacity are so important.
Transmission fluid gets contaminated due to both the environment (dust in the air) and friction materials working inside your C4 transmission. Because C4s generate high temperatures, heat takes a toll on fluid, friction materials, seals, and even hard parts like planetaries, clutch drums, and pistons. This is why having clean fluid and a fresh filter is so important. A C4's filter doesn't filter fluid as finitely as an engine's oil filter for example. It is more like a screen designed to catch particulates and other contaminates that can render your transmission inoperative in short order.