A modular hydrostatic transaxle includes an axle module removably connected to a hydrostatic transmission module. The axle module includes a differential connected to a reduction gear train and disposed in an axle casing. A pair of axles are connected to the differential and supported within the axle casing. The hydrostatic transmission module comprises a transmission casing separate from the axle casing and hydraulically connected pump and motor disposed in the transmission casing. The motor output connection includes a shaft piloted to an input drive of the reduction gear train, which constitutes the alignment mechanism of the transmission and axle modules. The pump and motor cylinder barrels are hydraulically connected through the pump and motor block at 90null orientation, and a portion of the pump and motor block forms an inclined surface which supports a face of a thrust bearing. At least one homogeneous low friction bearing strip is confined between the swash plate and the interior portion of the casing. A disconnect mechanism includes a spring that urges a sleeve to engage the output and input shafts. The brake disc is disposed on a distal end of the output shaft and a brake cover is fastened to the outer portion of the axle casing and substantially encloses the brake disc.