A bi-directional overrunning clutch is disclosed for controlling torque transmission between a secondary drive shaft and secondary driven shafts. The overrunning clutch includes a pinion input shaft in a differential housing that engages with a clutch housing rotatably disposed within the differential housing. At least one race is located adjacent to the clutch housing and is engaged with an output shaft. A cage is located between the race and the clutch housing. The cage is movable with respect to the clutch housing. A first coil is mounted within the differential housing adjacent to the cage and is adapted to produce an electromagnetic field when energized which causes the cage to drag with respect to the clutch housing. The dragging of the cage with respect to the clutch housing positions the cage to engage the clutch housing with the race when wheels on a primary drive shaft lose traction. A second coil is mounted within the differential housing adjacent adjacent to the cage. The second coil is adapted to produce an electromagnetic field when energized which advances cage with respect to the clutch housing causing the clutch housing to engage with the races. When the second coil is activated, the output shaft drives the pinion input shaft producing engine braking. An electronic control system is utilized to control the energizing of the coils.