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Try putting the vehicle in neutral and coasting under 5 Mph and switch it from 4 LO to 2WD or turn the vehicle on without starting it and switch from 4 LO to 2WD. This should work
 

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and what is the difference in kj liberty and kk liberty
The KK is the 2008 and newer model, a different look. KKs use a new manufacture for the transfer case that has an electrical switch selector and an electric motor in/on the case. The Command Trac IIs are basically the same part time case as before but the Sec Trac IIs are a lot different, with automatic, so called active FWD switching
 

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I had a similar problem today. Now when I am in the 2wd drive position (all the way forward, it says "part-time", when I am in the Partime (second postion back) it reads "Full Time". When I am in the usual full time position (3 up) it does not read anything.
My question is which is correct the lights or position? I heard that driving it in parttime on dry pavement is really bad so I am very concerned about this.
I want to avoid this until i get it fixed.
 

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Mine does the same thing. I wheel it hard, and the lights work as they should. Next time I wheel it, they are backwards. I don't worry about it. Go with the position of the shift lever, not the indicator light. Most likely its a flakey switch on the t-case, as stated above.
 

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Indicator light fixed-- here's how

Wife's 2005 Liberty had same problem after she was playing in 4lo to get through some snow in reverse.

After trying some other suggestions on this forum, the thing that worked in fixing the indicator light problem for us was:
- Put car in 2wd (lever all the way forward)
- Put car in reverse, got it moving to 2-3 miles an hour
- Depressed clutch, moved gear from R to neutral position
- With clutch in and while car was still coasting at 2-3 mph, moved TC lever from 2wd all the way to 4lo
- Continued back 5-10 ft
- Stopped
- Drove forward (1st gear) 5-10 feet, stopped again
- Got coasting 2-3 mph again in reverse, then depressed clutch, shifted from R to neutral, then moved lever from 4lo all the way to 2wd.
- Bingo! 4wd indicator light is now behaving as it should.
 

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Transfer case position sensor failure

I have a 2005 liberty used it in 4 lo and 4 hi and went to put it in 2wd and the part time light stays on .. I put it in 4wd hi and the light goes off.. Any ideas
I have a 2003 Jeep Liberty 3.7L which had the same problem. I know this is a late response, but the dealer replaced the transfer case position switch which had a recall on it that I was unaware of. Works perfectly now. Check with your dealer for recalls.
 

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Hi just wanted to thanks you. your process worked perfectly. mine was automatic transmission but same steps. Had to do it 3 times cause i didnt fully engage the 4LO the first time.
I have a 2002 wrangler put new tires on it same size 31 and my part time light came on - never put it in 4 wheel drive noticed also wheels kind do a poppin when doing extreme turns like sharp out of driveway . No problems before putting new tires :/ 3002 Tj wrangler
 
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