It was the first Australian Falcon to be offered with a V8 engine, the 200 bhp (150 kW), 289 cubic inch (4.7 L) Windsor unit.

[1] The XR marked the first time a V8 engine could be optioned in all trim levels of an Australian car, V8s having previously been reserved for the more upmarket variants.

The marketing focus on the Falcon's relationship with the Mustang's sporty appeal led to Ford introducing a Falcon GT variant of the XR in 1967, featuring a 225 bhp (168 kW) version of the 289 cubic inch (4.7 L) Windsor V8 engine, sourced from the Ford Mustang.

Ford Works Team manager/driver Harry Firth, and a young Fred Gibson won the 1967 Gallaher 500 at the Mount Panorama Circuit in Bathurst driving an XR Falcon GT.

[4][5] Firth and Gibson won the race by 11 seconds from their Sydney-based teammates Ian and Leo Geoghegan.