The present invention provides a method and apparatus for cooling and lubricating a pinion bearing of an automatic transmission. The apparatus preferably includes a carrier assembly partially defining a centrifugal compensation oil reservoir. A pinion shaft is supported by the carrier assembly. The pinion shaft defines an internal channel in fluid communication with the oil reservoir. The apparatus of the present invention also includes a generally annular pinion gear member circumscribing at least a portion of the pinion shaft, and a pinion bearing disposed radially between the pinion shaft and the pinion gear member. The pinion bearing is adapted to facilitate rotation of the pinion gear member relative to the pinion shaft. The pinion bearing is aligned with the channel such that oil transferred therethrough is applied to the pinion bearing, and the pinion bearing is accordingly cooled and lubricated by the oil. A corresponding method for cooling and lubricating the pinion bearing is also provided.