A rear axle assembly for a motor vehicle which includes two clutch packs to deliver torque to the right and left hand driven axle shafts of a motor vehicle. The axle assembly clutch packs are efficiently packaged within the axle housing within the inside the diameter of the axle ring gear. A single hydraulic actuator is used to apply hydraulic pressure through a closed circuit to pistons associated with each of the clutch packs to apply compressive force to the clutch packs to energize them. In this manner, the single actuator allows the axle to transfer torque between the ring gear to both the left and right hand axles.