A redesigned SN-95 Mustang came on December 26, 1998 for the 1999 model year. Characterizing the redesign was Ford's New Edge design language, which featured sharper contours, larger wheel arches, and creases in the bodywork, replacing many of the soft lines of the previous model. The Mustang also received new wheels and hubcaps. However, the car carried over the same roof line and interior, in addition to the same basic platform. All 1999 Mustangs (except the Cobra) received "35th-Anniversary" badges on the front fenders.
A "35th Anniversary Limited Edition" appearance option package came red, they featured a body-colored hood scoop, rear spoiler, side scoops and rocker panels, a blacked-out panel between the taillamps, and 17 by 8-inch (200 mm) five-spoke aluminum wheels; while the Interiors included black leather and vinyl seats with silver inserts and pony logo, aluminum shift knob, a unique instrument cluster with 35th anniversary script, silver and black floor mats with 35th anniversary logo, and silver door trim inserts.
The 3.8 L OHV Essex V6 returned as the base engine for 1999. A new split-port induction system replaced single-port induction, which increased the base model's output to 190 hp (142 kW; 193 PS) @ 5250 rpm and 220 lb·ft (298 N·m) of torque @ 2750 rpm. In 2001, Ford added Intake Manifold Runner Control (IMRC) which further increased the engine's output to 193 hp (144 kW; 196 PS) at 5500 rpm and 225 lb·ft (305 N·m) of torque @ 2800 rpm. During the second half of the 2004 model year, the 3.8 L Essex was replaced with the 3.9 L OHV Essex V6. The 3.9 L had a slightly longer stroke but output for the engine remained identical to the outgoing 3.8 L. The 3.9 L Essex only served in the Mustang for 1/2 a year before being replaced by the 4.0 L Cologne V6 in 2005.