A power transfer unit assembly for a vehicle. The power transfer unit includes a housing, an internal variable speed differential positioned within the housing, a first front side shaft rotatively connected to the differential, a second front side shaft rotatively connected to the differential, an input shaft interconnected to at least one of the first and second side shafts, and at least one shifting mechanism for engaging at least one of the first and second shafts with at least one mode selection gear set. Engagement of the mode selection gear set transfers torque through the input shaft to selectively engage with a second gear set interconnected to a power transfer final drive unit assembly having an internal variable speed differential.