A powertrain system includes a torque machine mechanically rotatably coupled via a transfer gear set to a drive wheel. The transfer gear set includes a first gear meshingly engaged to a second gear with lash angle between the first and second gears. A method for operating the powertrain system includes monitoring an output speed associated with the torque machine and a wheel speed associated with the drive wheel. A transition between a first torque transfer state and a second torque transfer state is detected, the transition including a gear lash event across the transfer gear set. An elapsed time period for completing the gear lash event across the transfer gear set during the transition between the first torque transfer state and the second torque transfer state is set, and a target output speed derived from the wheel speed during and at the end of the elapsed time period is determined. A preferred output speed profile during the gear lash event is also determined, and includes prescribed changes in the output speed associated with phase-shifting the lash angle from a minimum lash angle to a maximum lash angle. The output speed is adjusted to be substantially equal to the target output speed at the end of the elapsed time period. The torque machine is controlled to achieve the preferred output speed profile.