Does it roll free?Try letting it coast to see if it coasts well.That will rule out a break hanging up.

Next check the air filter.

Do you live in a cold climate and have you been letting it warm up a lot?They only get about 15 mpg anyway dont they?

Which engine-transmission-transfer case do you have? There is difference in fuel mileage between the smallest to largest engine. You are reporting 10 MPG. Perhaps you have the honking big V8 in yours.

In the past, I owned a '92 Jeep Cherokee and now have a '98 Cherokee, both with the 6 cy in-line, 4 liter engines. In good weather, highway mileage is 20+ mpg, but in this brutal winter, it has dropped to 15-18 mpg. I have found three factors that affect the mileage of my Jeep:

1. Low tire pressure - about 2 mpg. Inflate to 30-32 psi will get this back.

2. Low coolant temperature - about 2 mpg. If the thermostat is not working properly or is rated to open at too low of a temperature, the engine never gets warm enough. For the worst of cold, you may consider a radiator cover, but don't forget to open it as soon as the temperature rises to 20 F or so.

3. Failed temperature sensor, the one that sends engine temperature to the engine controller.

There is a little hit for 2-wheel drive versus 4-wheel drive, but not as much as might be imagined because the front drive shafts, differential, and universal joints are engaged all the time anyway. However, this statement holds only for the "full time" mode. If your transfer case has only "part time" drive when in 4-wheel drive, it should be disnegaged for regular driving on surfaced roads. The part time mode is only good for mud, sand, and snow where the wheels are free to slip. Part time mode forces both front and rear drive shafts to turn at the same speed - no center differential action. The drive train may bind and be damaged if operated in the part-time mode on paved roads, and will bind when turing. Small differences in tire circunference between the front and rear tire sets will cause binding in the drive train when in part-time mode on surfaces where the tires can get a grip. The part-time-only transfer case has very limited on-road use - its for off-road and getting out of mud holes.

johndeere, and jem are right on the path for my first thought as well. Excessive driveline loading, and or maybe brakes dragging can easily kill fuel mileage.

Being a 95, and NOT OBDII, the MIL not being on isn't that strong of a clue. That in some ways only means the on board system hasn't detected a fault, (or the lamp doesn't work) and in fact could be relying on sensor information that is in fact incorrect. This usually does result in some type of a driveability symptom, but not always. The S-10 that I have in here right now had a driveability symptom that the husband (an airplane mechanic) noticed right away, but the wife did not. Bob felt the truck was under powered, he has a bit of a lead foot, the Mrs. drives the truck in a much gentler fashion as was not aware of anything. They did both notice a loss of fuel mileage in the truck. I'll stress what is wrong with this one, has nothing to do with what could be wrong with yours, so telling you that the S-10 has a bad catalytic convertor does not do you any good for your Jeeps problem.

Tell me this, if you go to a parking lot and try to turn in a sharp circle, does the Jeep fight turning, and feel like it's locking up? (a driveline issue)

If you're driving short trips like 2 or 3 miles in cold weather (below freezing), 10 mpg is probably not that far off what you'd get. If it's way below freezing, approaching zero, then I'd be surprised if you get much more than 10 mpg on short trips. Jeep Wranglers get notoriously poor gas mileage, even with the four-cylinder. If you check the obvious stuff like tire pressure, which I assume you have, I would take it on a highway trip to see if the mileage improves.

hhmmm the parsidic drag and extra weight of 4 wheel drive, a vehicle geared and built primarly for off road use, it cuts through the air like a brick on wheels, and you want to know why it only gets 10 mpg.