The 1966 Mustang received only minor updates over the 1965 model. New paint and interior color options were introduced. A new front grill using slats replaced the honeycomb-style grill from 1965.

The Shelby Mustang, produced by Carroll Shelby, continued in 1966. In 1966, a special Hertz Shelby Mustang denoted the GT350H was produced. The cars were available for rent from Hertz and are legendary. They featured high performance 289 engines and were popular among drag racers. Folks would rent the GT350 for the weekend, remove the engine and drop it into their Mustang, and then race at the strip. At the end of the weekend they’d return the engine to the GT350, return the car, and no one was the wiser. Only 1000 Hertz GT350s were produced in 1966. Of those 1000, 800 bear the recognizable black with gold stripes paint scheme. Total Shelby Mustang production in 1966 reached 2380 GT350s.