The introduction of the Cougar finally gave Mercury its own pony car. Slotted between the Ford Mustang and the Ford Thunderbird, the Cougar was the performance icon and eventually the icon for the Mercury name for several decades. The Cougar was available in two models (base and XR-7) and only came in one body style; a two-door hardtop.

The 1967 Cougar went on sale September 30, 1966. It was based on the 1967 refaced first-generation Mustang, but with a 3-in-longer wheelbase and new sheet metal. A full-width divided grille with hidden headlamps and vertical bars defined the front fascia. At the rear, a similar treatment had the license plate surrounded on both sides with vertically slatted grillework concealing tail lights, a styling touch taken from the Thunderbird.