In April of 1964, the Ford Motor Company launched the Mustang, running advertising campaigns on all three major TV channels across America at the same time. This was a unique time in history as the largest population bubble in history was coming to age in America, and Ford sold 22,000 examples the first day the Mustang was available. By the end of the year, nearly half-a-million examples found ownership. Ford had created a new class of car practically overnight and had caught the rest of the United States auto industry off guard. The car was as much a means of transportation as it was a lifestyle statement. It had decent economy, brisk performance, sporty looks, and a great value-for-money. They were offered with a range of engines, body styles, and styling options appealing to a very wide audience. They were affordable and much of its engineering was shared with existing Ford products. It shared its floor pan and drivetrain with the Falcon which helped save considerable 'tooling' costs. Bodystyles initially included the 'Notchback' Coupe or Convertible. It shared its front double-wishbone/coil spring and leaf spring rear suspension with the Falcon. Differences included the Mustang cockpit which sat further back on the chassis, allowing for a longer front and shorter rear-end design and its roof and hood were also lower in comparison. There was a galloping horse in the grille, cut-away side sections, and the 3-section rear lights.

A year later, in 1965, the Mustang GT was introduced and included thicker roll bars, dual-mounted fog lights in the grille, quick-ratio steering, five dial instruments, dual exhausts that exited through the rear valance, and special lower body side stripes. The 'Rally Pac' option was also popular, adding a clock and tachometer.

The Fastback option became available in 1965, and in 1967 the entire range received a facelift, becoming bigger and offering additional passenger and luggage space. Larger V8 engines (289ci, 302ci, 428 CID) were also offered, including the 390 CID (6.4-liter) unit that debuted in the Thunderbird and offered 325 horsepower. The 1967 Mustang redesign did not have the seismic effect as the original car did in 1964, but it pave the way with its modern platform for Ford to extract more power. The pinnacle of performance was the Shelby Mustangs, with the GT500KR at the top of the heap.

In 1968, a GT390 2+2 in Highland Green played a starring role in the Steve McQueen film Bullitt.

There were few changes for the 1968 Mustang compared to its 1967 counterpart. Most of the changes were in subtle refinements to the exterior and interior. The horizontal grille bars and the F-O-R-D letters at the front of the hood were removed. The quarter panel ornament was modified and many safety features were added. New options for 1968 included rear window demist (coupe and fastback only), re-designed front disc brakes, an AM/FM stereo radio, and an all-new 302 cubic-inch engine. The 302-4V with 230 horsepower replaced the 289 Challenger Special of the previous years. The 289 engine was replaced entirely by the 302 version by December of 1967. To comply with new government regulations, the 1968 Mustang received front and rear side marker lights, an energy-absorbing steering column, and folding, flush-mounted interior door pulls.

For 1968, Ford produced 317,404 examples of the Mustang. Just over 25,300 were Convertibles. Approximately 9,228 were the S-Code 390. The 390CID 'S-Code' Mustang was produced between 1967 through 1969, and offered 325 horsepower and 427 pounds/feet of torque, putting it in close proximity to the 428 Cobra Jets 335 horsepower and 440 lb-ft. The 390 was based on the FE-Series V-8s introduced in 1958 for the Edsels and Thunderbirds and would remain in the market well into the 1970s.

In 1966, Ford began producing the limited-production High Country Special Mustang for the Colorado market. This was the first limited edition aimed at capitalizing on the Mustang's popularity. Only 333 were produced in 1966, divided between 274 hardtops, 20 fastbacks, and 39 convertibles, with small numbers of each also being sold in Nebraska and Wyoming. They wore unique colors of Timberline Green, Columbine Blue and Aspen Gold. The first-year High Country Specials had special brass badging that could be applied at the dealerships at the customer's discretion. For 1967, 400 High Country Specials were built, offered with the same choices of special paint. In 1968, that number was reduced to 251 cars. The 1968 version was more than just special badging and colors, they were nearly identical to the Mustang GT/California Special. They were given non-functioning body-side scoops with High Country Special decals, a fiberglass rear panel with Shelby-style sequential tail lights, a pop-open gas cap, and a fiberglass decklid with integrated spoiler and matching end caps. Hood hold-down latches and special body-side stripes were included, and the Mustang emblem in the front grille was replaced by a pair of Lucas rectangular quartz-halogen driving lights.

1968 was the second NHRA season with Super Stock as its own division. Ford introduced a special model that combined the fastback Mustang with a specially designed 428 cubic-inch V8 Cobra Jet engine. They were built to qualify the Cobra Jet as a production car for NHRA. With the help of Bill Stroppe, six cars were initially built, with that figure later rising to 50 Cobra Jet lightweight Mustangs. They all wore Wimbledon White paint with black vinyl interiors. Mechanical features included a heavy-duty 4-speed manual transmission, manual drum brakes, and a 3.89:1 rear axle. The early examples (about the first 20) were built without a seam sealer and sound deadening. To keep weight to a minimum, the radio and heater were removed. All came equipped with the modified 428 Police Interceptor V8 engine, a powerplant that was not yet available to the public on the Mustang. The VIN numbers were sequential, starting with 8F02R135007 and ending with 8F02R135056. These cars are commonly referred to as the '135' cars due to the first three digits of the VINs. The lighter cars were built to compete in the Super Stock/E racing category, while the other examples equipped with a slightly de-tuned Cobra Jet raced in the C/Stock class. It is believed that just 14 dealerships received these cars, three were sent to Canada, and ten went to the company's Stock Vehicle Department in Dearborn.

The California market accounted for about 20 percent of the total Mustang sales. Two Los Angeles-area Ford dealerships sold an average of 9,000 examples annually between April 1964 and March 1968. This was an average of 30 Mustangs a day for the six-day sales week. Lee Grey, Ford's District Sales Manager for Southern California, recognized the potential for a uniquely styled Mustang, combining Shelby-inspired styling cues with the more formal lines of the notchback Mustang. After a meeting with Lee Iacocca and the involvement of Henry Ford II, the California Special, also known as the GT/CS, was born. A total of 5,500 examples were slotted to be built and they were a Southern California-only product. They were upscale Mustangs fitted with special features that included a fiberglass trunk lid and quarter-panel extensions, a pop-off gas filler cap, non-sequential 1965 Thunderbird taillights, fiberglass side scoops, body striping, unique chrome model scripts, a blacked-out grille, either Lucas or Marchal fog lamps, and racing-style quarter-turn hood locks. The GT/CS could be fitted with any regularly available 1968 Mustang color, engine, transmission, and option package. Total production of the California Specials reached 4,118 examples with each example produced at Ford's San Jose, California assembly plant.