Some major changes to the Mustang occurred at the start of 1965 model year production, a mere five months after its introduction. First was an almost complete change to the engine lineup. The 170 in³ (2.8 L) I6 engine made way for a new 200 in³ (3.3 L) version which had 120 hp (89 kW) at 4400 rpm and 190 ft·lbf (258 N•m) at 2400 rpm. Production of the 260 in³ (4.2 L) engine ended with the close of the 1964 model year. With a new, two-barrel carbureted 200 hp (149 kW) 289 in³ (4.7 L) engine taking its place as the base V8, people started to excited. A 225 hp (168 kW) four-barrel 289 in³ (4.7 L) was next in line, followed by the unchanged "Hi-Po" 289. The DC generator was replaced by a new AC alternator on all Fords and the now-famous Mustang GT was introduced. Available was a four-barrel engine with any body style. Additionally, reverse lights were added to the car in 1965. Originally, the Mustang was available as either a hardtop or convertible. During the car's early design phases, however, a fastback model was strongly considered. The Mustang 2+2 fastback made its inaugural debut with its swept-back rear glass and distinctive ventilation louvers.
A machine built for the ages, Carroll Shelby converted (with Ford Motor Company's blessing), a special model designed with only two things in mind; winning races and beating Chevrolet's Corvette. Designated simply as the "GT-350", these purpose-built performance cars started as "Wimbledon White" fastbacks with black interiors. The fastbacks were shipped from the San Jose, California assembly plant and fitted with a Hi-Po 289, four-speed manual transmission, and included front disc brakes. Also shortened hoods and rear seats with identifying trim were among other visual variations. These few cars were converted to street, road racing, and drag cars in Shelby's plant at Los Angeles International Airport.
Modifications to both the street and racing versions included: side-exiting exhausts, Shelby 15 in (380 mm) magnesium wheels (though some early cars were fitted with the factory steel wheels), fiberglass hoods with functional scoops, relocated front control arms, (to reduce understeer and neutralize handling), quicker steering, Koni shock absorbers, a Detroit Locker rear end with Ford Galaxie drum brakes, metallic brake linings at all four corners, rear-mounted batteries, rear anti-sway bars with supped-up front anti-sway bar, dash-mounted gauges, a fiberglass parcel shelf and spare tire holder where the rear seat was intended to be. Among other engine modifications, considerable overhaul boosted output to 306 hp (228 kW). Hot Rod Magazine recorded a 0-60 time of 5.7 seconds.
When Ford stiffened the car's basic body structure, they included a front angled brace intended for the export models and so-called "Monte Carlo" bar; triangulating the under-hood shock absorber towers. Though Shelby's influence on the car diminished as Ford's grew, the 1965 to 1970 GT-350 and its "big-block" brother, the 1967 to 1970 GT-500 are among the most sought-after, and valued automobiles in the world; so too are the high-performance models offered over the years by other automotive tuners following in Shelby's footsteps.
The 1966 Mustang debuted with only moderate trim changes, and a few new options such as an automatic transmission for the "Hi-Po," a new interior and exterior colors, an AM/eight-track "Stereosonic" sound system, and one of the first AM/FM monaural radios available in any car. The 1967 model year would see the first of the Mustang's many major redesigns with the installation of big-block V8 engines in mind. The high-performance 289 option now took a supporting role on the option sheet behind a massive 335 hp 390 in³ (6.4 L) engine direct from the Thunderbird, which was equipped with a four-barrel carburetor. Stock 390/4speed equipped Mustangs of the day were recording ¼ mile times of mid 13's, with trap speeds of over 105 mph. A drag racer for the street took a stand during the middle of the 1968 model year, as the 428 Cobra Jet (7.0 L) officially rated at 335 hp (250 kW), but in reality producing well in excess of 400 hp. 1968 also was the first year of the 302 V8 (5.0L) which would see service in various forms until 1995 in the Mustang. 1969 saw the introduction of both the car's third body style and a hand-built muscle car intended solely to satisfy the homologation rules of NASCAR, the Boss 429.
Available in 1969 and 1970 only, with a standard Mustang SportsRoof (the new corporate name for the fastback) and the new Mach 1 muscle car version's deluxe interior, the Boss 429 sported none of the garish decals and paint schemes of the day. Only a hood scoop and 15 in (380 mm) "Magnum 500" wheels fitted with Goodyear "Polyglas" tires, with a small "BOSS 429" decal on each front fender, hinted that most powerful Ford V8 of all time was fitted under the hood. Ford intentionally underrated the Boss 429 for advantages both in racing as well as insurability at 375 hp (280 kW) and 450 ft·lbf (610 N•m) of torque. Even with racing touches straight from the factory such as aluminum heads with hemispherical combustion chambers, along with a combination of O-rings and seals in place of head gaskets, it was believed that yet another 75 to 100 hp (50 to 75 kW) was on tap once the single four-barrel carburetor, intake, the restrictive factory exhaust system, and engine speed governor were either replaced or removed. While power steering was a "mandatory option" on the Boss 429, neither an automatic transmission nor air conditioning was available. In the case of the latter, there simply wasn't enough room under the hood. It should be noted that due to the extremely free breathing capabilities of this huge motor, it wasn't necessarily the best choice for a street car. The Boss 429 made its power in a higher RPM range than most other big block street cars, and of course street racing was prevalent in the day. Owners of these could often be surprised by "lesser" cars of the day in stop light drag racing.
Also available during that two-year period was another homologation special for the up-and-coming sport of Trans-American sedan racing. The Boss 302 was Ford's attempt to mix the power of a muscle car with the handling prowess of a sports car. The automotive press gushed over the result, deeming it the car "the GT-350 should have been." Boasting a graphic scheme penned by Ford designer Larry Shinoda, the "Baby Boss" was powered by an engine that was essentially a combination of the new-for-1968 302 in³ (4.9 L) V8 and topped with cylinder heads from the yet to be released new-for-1970 351 in³ (5.8 L) "Cleveland". This combination meant that the Boss 302 was good for a conservatively rated 290 hp (216 kW) through its four-speed manual transmission. Ford originally intended to call the car Trans Am, but Pontiac had beaten them to it, applying the name to a special version of the Firebird. In the ¼ mile the Boss 302 could post very similar times to the Boss 429, oddly enough, despite the smaller displacement and an incredibly free-breathing induction system in the car. It should be noted that the blocks from these cars are incredibly strong, and Ford Racing plans on selling new Boss 302 blocks in the near future.
Now based on the mid-sized Ford Fairlane/Mercury Comet instead of the compact Falcon, the Mustang grew larger and heavier with each passing year culminating with the 1971-73 models; designed under the supervision of Ford's new product design manager, Semon "Bunkie" Knudsen, originally of General Motors. Knudsen's turn at the helm would see the last high-performance big-block Mustang, 1971's 375 hp (280 kW) 429 Super Cobra Jet. Unfortunately, that very same body style was designed for the sole purpose of big-block installation versions, and was limited to a maximum of 351 in³ (5.8 L) in 1972 and 1973, due almost entirely to extremely strict U.S. emission control regulations. Two more high-performance engines were introduced in 1972, the 351 "HO" and 351 Cobra Jet. Both cars were excellent performers, but at nowhere near the level of the Boss cars and original Cobra Jet. Car companies switched from "gross" to "net" horsepower and torque ratings in 1972, making it difficult to compare horsepower and torque ratings. Very much a different car than in 1964, Ford was deluged with mail from fans of the original car who demanded that the Mustang be returned to the way it had been.