In this thesis, we explain developing processes of the power transmission system for lift truck. Conventional power transmission system had some problems such as spatial constraints or low speed and high torque problem. Because conventional power transmission system was mainly designed for high speed vehicles. In this paper we developed power shift drive axle specialized for $2.0{sim}3.5$ ton lift truck. Innovative structure of transmission which is built in inside axle, enables to reduce system weight and size by 40% compared to the conventional power transmission system. Also, it is possible to do additional functions such as auto parking system and anti-roll back system.