A diagnostic system for a vehicle speed sensor is provided. The system includes: an upshift module that selectively initiates an upshift of a transmission based on a vehicle speed sensor (VSS) signal; a speed drop detection module that monitors at least one of engine speed and input speed for a reduction in speed due to said upshift; and a torque request module that monitors engine torque and selectively diagnoses a VSS malfunction based on said speed reduction and said engine torque.