Volvo 940 Forum : “how does the overdrive button work?”

All the overdrive button does is turn on or off an electrical solenoid which directly couples the torque convertor with the driveshaft in order to provide higher fuel mileage in long, flat stretches of driving like highways.  Overdrive is typically not recommended for hilly areas as the transmission will tend to "hunt" for the right gear.

No. The other user in confusing OD with lockup. Turbo cars have OD, but no lockup on their torque converter, for example. When you press the OD
button on the back of your shifter and the yellow arrow appears on your dash, you have disabled overdrive, or "fourth gear". When you are in D or
third gear, your tires are doing one revolution per engine revolution. Once in OD, your wheels will spin faster than the engine, thus being
overdriven....

i have one and what it does it help the car slow and power up hills i drive my auto in the lowest gear "1"then when it gets close to redline
i shift up to "2" then when i hit 80 i turn off the over drive   but if you drive it in the lower gears you get better acceleration but it
stresses out the engine!