The 1980 model year brought new exterior sheet metal for the Diplomat, although wagons were unchanged from the doors back.

The front end was more evolutionary than revolutionary, but in order to share a hood with the newly restyled Chrysler LeBaron the grille was narrowed considerably.

The roofline of the sedan was also made more square, marginally improving headroom, and conservative, Buick-like taillights appeared on all but the wagons.

Dodge would not market another truly full-size car (at least based upon United States Environmental Protection Agency (EPA) passenger volume statistics) until the Monaco debuted as a 1990 model.

However, its older and larger rear-wheel drive Dodge Diplomat (as well as the Chrysler LeBaron and Fifth Avenue) continued to sell.

Chrysler's then executive vice president for manufacturing, Steve Sharf, met with officials at American Motors (AMC) to use the extra capacity at an assembly plant in Kenosha, Wisconsin to build the cars.

For 1984, the appearance of the upscale Special Edition or SE used the Fifth Avenue's front end with its parking lights located above the headlights, and a bright metal cross overlaid on the Chrysler grille's thin vertical bars.

Sales of cars equipped with the Police Package represented about half of the Diplomat production after the discontinuation of the coupe and station wagons.

[5] Late in the Diplomat's run, the car was subject to the federal "Gas Guzzler Tax" and it also required premium unleaded gasoline.

Although sales remained strong, Chrysler CEO Lee Iacocca held a low opinion of the M-body line as a relic of the pre-K car era and declined to invest any money in them.

Despite lower gas prices in the mid- to late-1980s and a 2.26:1 rear-end gear ratio, the Diplomat's carbureted engine and lack of an overdrive gear on its TorqueFlite automatic transmission resulted in poor fuel economy compared with its larger competitors from Ford and General Motors, as evidenced by comparing the EPA estimates for 1986 models: However, Diplomats built from mid-1988 until the end of production were among the first Chrysler-built products to have a driver's side airbag as standard equipment, some two model years before the remainder of Chrysler's lineup and they were also among the only cars at the time to offer a tilt steering column with an airbag.

Diplomats with airbags differed from earlier models in that they were also equipped with a padded, color-keyed knee blocker which extended out from beneath the instrument panel in front of the driver.