Welcome to the forum, Tommy. Here's your answer:

The compatibility issue lies not with the transmission, but with the valve body, which is essentially the "brain" of the transmission. Much of the information below is a re-post from a writeup in my build thread.

The early model years (1996-1998?) used a VB like the one below. Notice the overall length, which is shorter than the later versions, and the presence of the tubes (there should be two tubes, one has been removed in this photo) on the left hand side. The tubes are transmission fluid paths that were integrated into the actual VB on later versions. Also note the connection for the transmission kick-down cable @ bottom center. The other end of that cable connects to the throttle body and controls line pressure in the transmission @ various throttle positions. Last, notice that there are only three electronically controlled shift solenoids. Two along one edge and the third at the end near the tube.



The mid generation model years (1998-2000?) used a VB like the one below. Notice the increase in overall length, and that the VB now encompasses the fluid paths that were previously separate tubes. Also, notice that there is still a connection for the transmission kick-down cable to control transmission line pressure. Finally, there are still three electronically controlled shift solenoids, but their position on the VB has changed. All three solenoids are now aligned on one side of the VB.



Last but not least you have the late model VB (I know for sure this one is found on 2001-2002 model years). This version retains the overall shape and size of the previous version, but there are changes to the hydraulic controls. Where line pressure was controlled manually by a kick-down cable on prior versions, it is now controlled electronically by the ECU using a 4th solenoid, the SLT solenoid. This goes hand in hand with the drive-by-wire feature found on the 01-02 models. Take a peek under the hood of a ’01-’02 and you’ll notice that there is only one cable connected to the throttle body, which is a failsafe throttle cable. The transmission kick-down cable is eliminated on these model years. This version also gets a 5th solenoid, which is the Shift Control Solenoid, however it is not electronically controlled. The two new solenoids are visible at bottom center, where the cam and kick down cable were located on previous models.



You will not be able to install the transmission from the '01 into your '96, due to the presence of the SLT solenoid on the '01 transmission valve body (and the corresponding lack of provisions for a kickdown cable), which the ECU on your '96 will have no means of controlling. Also, you will not be able to install the valve body from the '96 transmision into the '01 transmission because the fluid paths are laid out differently, due to the '96 valve body having the separate tubes, as pictured above.

You need to get your hands on a transmission that came from a similar model year 4Runner ('96-'98) that has the same type of valve body and provisions for a kickdown cable. The only other potential solution would be to pick up a transmission from one of the mid-gen model years, which also have the provisions for the kickdown cable, along with the updated valve body. However, I'm not even sure that would work because there maybe be differences between the solenoids on the two versions of the valve body that would result in compatibility issues with the ECU.

Hope that helps.