Got a 1997 Jeep Grand Cherokee that shifts into four-wheel drive part time and four wheel full time but when I go back to two wheel the front differential seems still locked. What locks the front differential in and out of four wheel? The rear wheel spins so it clearly isn't in four wheel any more.

It is just a little spring inside the rear of the case. Sometimes when it won't unlock, you need to stop and back up a little and take the pressure off the gears first

The front axle is a "live" axle. They're always connected. When you shift into 4wd the transfer case connects the front and rear driveshaft. when you shift out of 4wd the front and rear drive shaft are disconnected.

There were some early XJ's that had the CAD axle which would disconnect but the Grand Cherokee never came with them.

Shifting the NP/NV242J Selec-Trac Transfer Case

2WD Position
This position is for driving on hard-surfaced roads under normal driving conditions when 4-wheel drive is not desired.

4x4 PART TIME Position
This position is designed for temporary use of 4-wheel drive when on-or off-road conditions such as deep snow or heavy ice require increased traction. When engaged, both the front and the rear axles are mechanically locked together and turn at the same speed. Do not use 4x4 PART TIME on dry, paved roads.

To engage, shift transfer case from 2WD to 4x4 PART TIME while the vehicle is moving at any legal speed.

An amber PART TIME lamp will illuminate on the instrument cluster when 4x4 PART TIME is selected.

4x4 FULL TIME Position
This is the primary 4-wheel drive position, which offers better traction when roads are wet, snow covered or icy. When engaged, the front and rear wheels axles are permitted to turn at different speeds to enhance maneuverability. Use 4x4 FULL TIME year-round on all road surfaces if you wish.

To engage, shift transfer case from 2WD to 4x4 FULL TIME while the vehicle is moving at any legal speed. When shifting, do it in a swift and firm movement.

When shifting from 2WD through 4x4 PART TIME to 4x4 FULL TIME, two momentary releases of the accelerator may be required after shifting.

A green FULL TIME lamp will illuminate on the instrument cluster when 4x4 FULL TIME is selected.

4 LO Position
This position is designed for temporary use of 4-wheel drive when off-road conditions require added low speed pulling power. Do not use 4 LO on dry, paved roads.

To engage, slow the vehicle to 2-3 mph (3-5 km/h), shift the transmission into Neutral (N), then shift the transfer case lever to Neutral, then to the right and pull firmly rearward to 4 LO.

Never attempt to engage Low Range when the vehicle is moving faster than 2-3 mph (3-5 km/h). Transfer case damage may result.

An amber PART TIME lamp will illuminate on the instrument cluster when 4 LO is selected.

Thank you all for your help, I'm running it in 4 full until I get it figured out. I'm going to try to adjust the shift linkage, see if that helps

that's fine, but have you tried the shifting tips I provided?
Are all 4 of your tires the same size and inflated equally?