My 4Runner has 32,000 miles on it and the 4WD is rarely used. However, from time to time I push in the shift button to go from H2 to H4 just to check it out and maybe drive 5 miles before shifting back to H2. As soon as I push in the button to return to H2 the 4WD dash light starts flashing. I've tried driving in forward and reverse and the lights continue to flash. I'm assuming I'm now in H2 but can't get the lights to stop flashing. Anyone got ideas on the cure.
By the way, sometimes it corrects itself and the lights go out. Never know when it will happen again, but it does.

Try driving in a figure 8 pattern

This also happened to me two months back. Going back and forth did not help, so I took it to my local toyota dealer and had them check it out. It was the vacuum line for the front diff. It was plugged, replaced it and been fine ever since. Hope this works for you as well.

Don't guess at it, troubleshoot! Start at the twin VSV's (Vacuum Switching Valves) on the driver fender wall. There are two long vacuum hoses that come up from the diff, one goes to each VSV. Check to see that one of the two hoses has vacuum (engine running, 4WD NOT engaged. If no vacuum either side, check the check valve going to the intake manifold and look for loose hoses or a hole in the reservoir. If there is vacuum on one hose, then put it in 4WD. See if the vacuum switches to the other hose. If it does, and no 4WD, problem is the diff actuator or the line to the diff. If it does not, then just switch the hoses and you should go into 4WD. This confirms diff is okay.

OK, switch them back. Then use a test light to see if electrical signal from the TC also switches sides of the VSV. If it does not, problem is the switch on the TC. If it does, but the vacuum does not, the problem is the VSV itself.

I start troubleshooting at the VSV's because you can figure out where the trouble is without having to climb under the truck.

Nice.

X2 on doing a figure 8. Always works for me when it happens. Btw it is a fairly common problem with the push button 4wd.

Many "thanks" TheDurk. You are a genius. You put me on the right track and the problem is solved.

Thanks. But please satisfy my curiosity, what was the problem and what was the fix?

x2 let us all know in case it happens to us

Giving a bump to this thread.....
I'm a newbie to this forum and to the world of my 3rd gen. 2000 Limited T4R. I have been lurking for a while and finding some valuable info on this site.
Being Labor Day, my local mechanic is closed for the day, but before I take my rig in to see him this week I want to be as educated as possible as to what I may potentially be dealing with here. So here is the situation....
Driving home from the beach yesterday, cruising around ~65-70mph down I40. Out of no where, my dash 4X4 light starts flashing. I panic and start yelling at my kids for what I thought was one of them accidentally hitting something on the shift lever, etc. The weird thing was that the flashing was intermittent. I pulled into a rest area and ran thru the various 4x4 options (4H, 4L) and everything seemed to engage correctly. FYI - this was the first time I have engaged any of the 4x4 options. For the next 2 hours of driving, the flashing light would come and go.
I have read thru pages of the threads related to this and feel almost overwhelmed. I don't expect anyone to diagnosis my problem thru an online forum, but if anyone had this same exact problem or has suggestions please let me know. BTW, drove 22 mile to work today with no flashing light. Here are a few things I've gathered:
1) Suggest to mechanic that there could be a bad switch/sensor on the front diff and or the transfer case sensor
2) check vacuum lines
3) FYI - all of the fluids (diff, transfer, etc.) were changed in rig before I purchased it

Thank you in advance and happy to be apart of the 3rd gen herd!

Intermittent problems are hard to diagnose.

Check you switches and Check the actuator motor that is attached to the transfer case.

Exercise your 4wd system often and the problem might never come back

Thanks for the reply Singtoe.

Just to make sure I am totally understanding how my T4R functions....

When the 4x4 light was flashing, my rig was telling me that there was an issue in me engaging or disengaging the 4x4 system? Again, I never used the 4x4 - the light just started flashing while driving. So, I pulled into a rest area and ran thru the 4H, 4HL & 4L (they all seemed to engage and disengage correctly). Drove off and a while later flashing was back.

If my car thought everything was in order, the 4x4 light would be solid green? How about the center transfer case circle. Would it be green only in 4HL and 4L (locked mode)?

Geez

You ever find out?? Trying to diagnose my buddys, replace tcase and front diff already. 4 wheel light green solid, but the center orange flash. Once I shift into 4h or 4l green all solid. When I push Awd button the light flash. But only in the awd mode!��