An automotive vehicle sway bar assembly includes two opposed sway bar members interconnected by a hydraulically actuated latch operable to effectively decouple the sway bar members. Alternatively, the sway bar assembly may include an integral center section interconnecting the opposed sway bar members and the latch is operable to modify the effective stiffness of the assembly. The latch includes a housing with two opposed latch members axially moveable relative to each other between fully engaged positions for transmitting torque from one sway bar member to the other or partially disengaged to effectively decouple the sway bar members from each other. An anti-backlash lock member is engageable with one sway bar latch member to reduce backlash created by a splined connection when the latch members are fully engaged with each other.