A retarder control embodying the concepts of the present invention utilizes a spool valve having a spool valve member axially translatable between an on- and an off-position. A spring is employed to bias the spool valve member toward its off-position. A torque converter, a cooler and a retarder each have an input and an output that are ported through the spool valve. The retarder is selectively ported to a hydraulic return through the spool valve, and a modulating solenoid may be employed to feed pressurized hydraulic fluid against the spool valve member not only to move the spool valve member against the spring toward its on-position but also to regulate the axial translation of the spool valve member in order to control the pressure at the retarder discharge that is also ported through the spool valve. A cooler communicates directly with the converter when the spool valve member is in its off-position. To the contrary, the cooler communicates directly with the retarder when the spool valve member is in the on-position. First and a second reaction sub-chambers are disposed in opposition against the spool valve member. A spring is received within the first reaction sub-chamber. A modulating solenoid effects continuous communication of pressurized hydraulic fluid to the second reaction sub-chamber when the spool valve member in its on-position, and a conduit selectively communicates pressurized hydraulic fluid to the first reaction chamber.