What does Transmission Fault warning light means on a 1998 Jaguar XK8?

The transmission for this model (and all the way through 2006) has a known defect. A recall was done in 1999, but only on a portion of the XK8s out there. After the recall, Jaguar did NOT redesign or modify the transmission and continued to put the same defective transmission in all successive models through year 2006.

Because the transmissions is sealed for its lifetime (100k miles), it is not supposed to require any maintenance; however, because of the defect, these transmissions tend to fail around the 70,000 to 80,000 mile mark. The "Transmission Fault" message is your clue. Take it to your repair shop. They will likely have to replace the transmission at about $10,000 to $12,000 cost to you if you are no longer under warranty.