WHILE DRIVING DOWN THE FREEWAY, DRIVER OBSERVED SMOKE COMING FROM REAR OF VEHICLE. THE VEHICLE WAS PULLED TO THE SIDE OF THE ROAD, BOTH DRIVER AND PASSENGER EXITED SAFELY, AND OBSERVED FLAMES COMING FROM THE AREA UNDER THE REAR OF THE CAR (STATION WAGON BODY, AWD MODEL) ABOVE THE DIFFERENTIAL AND NEAR THE GAS TANK. RESPONDERS QUENCHED THE FIRE. THE VEHICLE WAS EXAMINED AND FOUND THAT THE WIRING FOR THE FUEL PUMP HAD THE INSULATION MELTED OFF, THE FUEL PUMP GASKET WAS COMPRIMISED, AND THERE WAS EVIDENCE OF FLAMES HAVING BEEN IN THE AREA. FURTHER INVESTIGATION FOUND THAT WHEN THE VEHICLE WAS DRIVEN SHORT DISTANCES, THE DIFFERENTIAL BECAME "RED HOT". THE AXLE WAS REPLACED, AND THE VEHICLE WAS DRIVEN APPROXIMATELY 30 MILES ON BOTH INTERSTATES AND SECONDARY ROADS, AFTER WHICH THE DIFFERETIAL WAS SEEN SMOKING FROM THE HEAT THAT HAD BUILT UP. THE VEHICLE WAS RETURNED TO THE MECHANIC WHO REPLACED THE AXLE A SECOND TIME, WITH THE SAME OVERHEATING OBSERVED. IT IS THE MECHANICS' OPINION THAT THE INITIAL FIRE WAS CAUSED BY THE OVERHEATING DIFFERETIAL. FURTHER, HIS RESEARCH INDICATES THAT THE OVERHEATING IS CAUSED BY A FAULTY CLUTCH PACK AND SELENOID IN THE AUTOMATIC TRANSMISSION.