Although the Mark X was selling less well than hoped, especially in its intended market of the U.S., Sir William decided to retain all three models in the Jaguar range concurrently.

[3] Despite the S-Type's weight gain of 152 kg (335 lb) over the Mark 2, no changes were deemed necessary to the Dunlop four-wheel disc braking system.

The Burman power steering system in the Mark 2, with its 4.3 turns lock-to-lock, was regarded as being excessively low geared and lacking in road feel.

In the S-Type it was replaced by a higher-geared Burman unit of 3.5 turns lock-to-lock, which linked the input shaft and hydraulic valve by a torsion spring to improve its "feel".

Warm air could also be directed to the rear passengers through an outlet situated on the propeller shaft tunnel cover between the two front seats.

It carries the drive, braking, suspension and damping units in a single fabricated steel crossbridge, which is isolated from the bodyshell by rubber blocks.

Lyons wanted to introduce some of the Mark X's sleeker and sharper lines into the S-Type but with limited time and money available, most effort was applied to restyling the rear bodywork.

[5] quotes Cyril Crouch, assistant chief body engineer at Browns Lane during development of the S-Type, as saying: "We ourselves appreciated what an ugly looking car it was, and when it came out there was a ... 'Is that the best you can do?'

"The reasonable sales success of the S-Type prior to the release of the Jaguar 420 suggests that not everyone was as offended by its styling as Mr Crouch.

The significant styling changes between the Mark II and the S-Type were:[5] the tail was extended, with styling features similar to the Mark X, but scaled down; the Mark 2's spats over the rear wheels were deleted and the rear guards reshaped and brought lower over the wheels; new slimline bumpers were used front and rear, the front bumper still featuring a dip to reveal the full depth of the radiator grille; wraparound indicators and low mounted sidelights were added at the bottoms of the front wings; the fog lamps were recessed more deeply into the wing fronts; the grille was given a thicker surround and center bar; the headlamps were given a small peak, making the car look longer and thus going some way towards balancing the longer tail; the roofline was lowered, made flatter and extended rearwards slightly; and the rear window became larger and more upright.

Interior differences between the Mark 2 and S-Type included[5][6] a scaled down Mark X burled Belgian walnut veneer dashboard with a burled walnut pull-out map tray below the center section, the veneer extending to the dashboard center section, which in the Mark 2 had been covered with black vinyl; a full width parcel tray was fitted below the dashboard; new controls were provided to go with the improved heating and ventilation system; the front seats were widened to give the appearance of being almost full width, and each was provided with an inboard armrest; the center console was redesigned to suit the wider front seats and rear compartment heating arrangements; the door trims were given horizontal fluting; Mark X type armrests were added to the front doors along with an elasticated map pocket; the rear doors were given new armrests with a flip-top ashtray and magazine pocket; the front seats were given a new fore and aft adjustment mechanism that raised the rear of the seat as it was moved forwards; the backs of the front seats were made thinner to the benefit of rear seat passenger legroom, and the rear seat had a 50 mm (2.0 in) thinner squab and its backrest was more steeply angled, further benefiting headroom already enhanced by the slightly higher rear roof line.

The latter two classifications come particularly clear to anyone who spends much time with the car in the wet, when the sure-footedness of its all independent suspension and the Dunlop RS-5 tyres makes its responsive handling an absolute revelation.

These were: The only production development not shared by both the 3.4S and 3.8S was that the Powr-Lok limited slip differential option ceased to be available on the 3.4S when the 1967 cost saving trim revisions were introduced.

In 1966 a dashboard switch was provided for the heated rear window, which had previously remained "on" as long as the ignition was on, leading to instances of flat batteries.

Top seller in 1968 was actually the venerable Mark 2, potential buyers of both the S-Type and 420/Sovereign hanging back to wait for the new Jaguar XJ6.

Production figures for each year of the S-Type's life were: 1963 – 43 1964 – 7,032 1965 – 9,741 1966 – 6,260 1967 – 1,008 1968 – 909 Rear independent, with lower wishbone and driveshaft as upper link, radius arms, and twin coil springs with telescopic dampers