Toyota Repair: 1997 camry transmission shift late, 3000rpm, transmission fluid

Question
I have a 1997 Camry with automatic transmission, 135K.  When the engine is cold, the transmission revs to at least 3000RPM before shifting between 2nd and 3rd.  After the car warms up, it shifts much earlier.  This is new.  Is it a problem?  what might be the cause?

Answer
The first thing to do is to check the transmission fluid, it should be checked with the engine running at operating temperature, if the fluid is dark and smells burned it is a good indication that there are slipping clutches and the transmission will need to be replaced.