The 1968 Mustang was little changed from it 1967 counterpart. Most of the changes were in subtle refinements to the interior and exterior. New options for 1968 included an AM/FM stereo radio, rear window defogger (coupe and fastback only), re-designed front power disc brakes, and the all new 302 cid engine.

The 302-4V, 230 horsepower engine replaced the 289 Challenger Special of previous years. By December of 1967, the 289 engine was replaced entirely by the 302 version.

Other changes included the deletion of the horizontal grille bars, the deletion of the F-O-R-D letters at the front of the hood, simplification of the quarter panel ornament, and many safety features.

Due to increasing governmental regulations, the 1968 Mustang now included front and rear side marker lights, folding, flush mounted interior door pulls, and an energy absorbing steering column.

There were several "region specific" models offered from various dealers. Two of the most noteable were the California Special, and the High Country Special.

Total production for 1968 was 317,404 units.