I'm a new owner of a 1986 1/2 xj with a 4.0l and auto. (first xj ever own)
I have been driving it for about a week and have notice that the overdrive keep coming on and off between 35 and 45 mph. It gets so annoying while im driving in town.
I have already changed out the trans filter and oil.
Is there a sensor or something i need to clean or change out?

 

probably not the over drive
probably the torque converter not locking
there are lots of thing that can make it happen
speed sensor on the TC
TPS
shift control computer

I had the same problem and it ended up bing the brake peddle was not returning all the way and that was making the torque converter to not lock up

 

Just a little update,
It was the TPS. I used the info on this link. It worked.
Overdrive is working correctly now. Thanks for the help Mike.
http://autorepair.about.com/library/faqs/bl232i.htm