A method for controlling a vehicle driveline having a power source and a transmission clutch includes using a difference between two spaced locations in the subject vehicle driveline to determine driveline twist speed due to applied torque, using a product of driveline twist speed and a sampling interval to produce an estimated driveline twist from the sum of incremental changes in driveline twist that are between predetermined upper and lower magnitudes, producing, in response to a demanded wheel torque, a first signal that controls torque transmitted from the power source to the clutch during a lash crossing using the estimated driveline twist and the current driveline torque; and producing a second signal that controls clutch torque capacity such that clutch slip is produced during the lash crossing.