"The Boss Is Back"

In 1982, Ford reintroduced a high-performance Mustang GT which opened the door for an entirely new era of the muscle car. Wringing a then-respectable 180 hp (134 kW) from its "5.0" (actually 4.9 L/302 in³) Windsor V8 and backed by a four-speed transmission, aggressive tires and stiff suspension, magazine ads of the period shouted, "The Boss Is Back." This, by the way, was the first of the "5.0" Mustangs, cars that gave birth to an entire aftermarket performance industry and continue to remain extremely popular today. This engine was dropped in favor of the new overhead-cam 4.6 L Modular V8 from the Lincoln Town Car.
In 1994, the Mustang underwent its first major redesign in 14 years. This incorporated some stylistic throwbacks to early Mustangs. The car remained rear-wheel drive. It greatly revived the popularity of the brand. The base model came with a 3.8 L V6 engine and the GT the "5.0" 4.9 L V8. A high performance 240 hp (179 kW) 5.0, larger brakes, and suspension modification was available on the Cobra models. The Mustang was Motor Trend magazine's Car of the Year award for the third time in 1994.

In 1996 the 5.0 engine was replaced by a 215 hp (160 kW) 4.6 L SOHC V8 known as the modular motor. The Cobra version was modified that year with a 305 hp (227 kW) dual over head cam configuration of the 4.6 L V8. Horsepower in the GT was increased to 225 for '97 and '98.

In 1999 the body style was updated and the Mustang GT's horsepower increased to 260, while the Cobra claimed 320 hp. Testing by Car and Driver magazine and numerous buyers contradicted these claims, and Ford was later proved to have misstated the horsepower gains. As a result, the Cobra was not produced in 2000, and the company developed new parts to replace the missing power.

Special Cobra R versions were available, in limited edition, in 1993, 1995, and 2000. Mostly race cars, they were stripped of air conditioning, radios, and back seats. The suspensions were finely tuned. In 1995 and 2000 the Cobra R's had increased displacement engines (5.8 L and 5.4 L, respectively) that made these cars extremely potent track machines.

As electronic engine management and emissions technology developed, so too did performance. The lone remaining 1960s muscle car marques, Mustang, Camaro and Firebird, grew in power and handling better than the cars that preceded them. With production of the Camaro and Firebird ending in 2002, only the Mustang remains as the sole survivor of the ponycar era.
In 2004, Ford produced a special 40th Anniversary Edition of the Mustang. Available in both Standard and GT editions, it consisted of 40th Anniversary badging, special metallic red paint with gold stripes, enhanced interior, and some "special" collectable items for the owner. It also marked the end of this design of the Mustang, as 2005 ushered in an all-new model.