The 1967 Mustang grew in size to make room for bigger engines. While the basic shape was retained, additional exterior cues differentiated it from the previous years. Square mirrors, concave taillights, and side scoops were among these. In addition to the high-output 289, a 390 cubic inch (6.4L) V8 was added, which produced 320 hp.

On the interior, the air conditioning vents were now fully integrated into the dash. The deluxe interior package included brushed stainless steel trim, additional color options, a tilt steering wheel, and unique dash panels.

The 1967 Shelby started diverging in looks more from the regular Mustang (the 1965 and 1966 Shelby Mustangs look more or less like stock Mustangs). Such cosmetics include a modified 1967 Mercury Cougar tail light assembly, side air intakes, and a factory roll cage. The legendary GT500 was introduced alongside the GT350. It featured a monstrous 428 engine. Shelby produced 1175 GT350s and 2048 GT500s in 1967.