Jaguar had considered cutting their existing V12 in half to build a V6, or possibly a V8, but chose instead to develop a new inline six.

It uses an aluminium block to reduce weight, and has an optional DOHC head for higher efficiency and power.

Power was reduced to 201 hp (150 kW; 204 PS) for versions having catalytic exhaust system.

Vehicles using the 3.6 were: The 2.9 L (2,919 cc) used a SOHC head from the Jaguar V12 engine, and was prone to failure.

The 2.9 Engine was, as in earlier years the 2.8 XK-engine, sized to match road-tax regulations in some European Countries like Italy or France.

In France cars with more than 3 litres of engine size had to pay a luxury tax.

The 4.0 L (3,980 cc) engines as used in the 1990–1994 XJ40 cars continued with the crank sensor and empty distributor type of ignition system and the hot-wire Mass Air Flow sensor type of fuel injection control system as the 1988–1989 3.6 L (3,590 cc) XJ40 cars.

Interior-wise it included special stitching, "sport" or "XJR" embossed front headrests, and Jaguarsport speedometer labels and tread-plates.

The later one ("XJR") is most common and the only badge that could be chosen on the boot infill panel models.

Cars using the 4.0 and 3.2 included: Both the 3.2 and 4.0 were substantially revised for the 1995 launch of the renewed Jaguar XJ (X300) saloon.

Cars using the 4.0 and 3.2 included: A supercharged version of the 4.0 L (3,980 cc) AJ16 was released in 1994 in the Jaguar XJR which used an Eaton M90 blower to boost output to 240 kW (326 PS; 322 hp) and 512 N⋅m (378 lb⋅ft)