While 1967 was a year of styling changes for the Mustang, Ford really got busy under the hood in 1968. Another hallmark of this year is the introduction of federally mandated emission controls and new safety requirements.

The biggest exterior change was the addition of side marker lamps on the fenders and rear quarter panels. The simulated air scoop was gone, replaced with a thin chrome strip. The Ford letters were removed from the hood and the grille bars that showed up in 1967 were again deleted. The Mustang fender emblem was changed from block letters to a script design.

Inside also saw little change. The rear view mirror was now a breakaway design with its base glued to the windshield. The steering wheel no longer was a three-spoke design with a horn button, but a two spoke design with a horn bar designed to increase safety. The Interior Décor Group now offered wood grain appliqués to decorate the interior.

The 289ci four-barrel and 289 HiPo were replaced with the 302ci four-barrel. The 289ci two-barrel was also dropped by mid-year in favor of the 302ci two-barrel. New offerings were the High Performance 302 and the 427 big block, which were soon overshadowed by the 428 Cobra Jet (CJ), which took their place. Also introduced this year was the 250ci six-cylinder.

Three special edition Mustangs were offered in 1968.  The Mustang Sprint was available as either a six or eight cylinder with GT stripes and pop-open fuel cap.  The six-cylinder package came with full wheel covers while the eight-cylinder came with styled steel wheels and GT fog lamps. The California Special and High Country Special were identical except for the logos. Identifying characteristics of these cars include fog lamps mounted to a grille without the standard chrome trim and running horse emblem, fiberglass side scoops and fiberglass rear panel with 1965 Thunderbird tail lamps.