The Cherokee was a redesigned reintroduction of a two-door body style, with a single fixed rear side window with an optional flip-out section.

When it was equipped with the net 215 hp (160 kW; 218 PS) 401 cu in (6.6 L) AMC V8 engine, it would outrun other 4x4s in its class, and, with 3.07:1 highway gearing, could reach speeds in excess of 100 miles per hour (161 km/h) (early models had 120 mph speedometers).

A T-18/T-18a four-speed manual gearbox was standard for all years, while through 1979 the General Motors' Turbo-Hydramatic TH400, more commonly fitted to 3/4- and 1-ton trucks rather than SUVs, was optional.

A gear-driven Dana 20 transfer case with 2.03:1 low range was standard with the manual gearbox (which had a much lower first gear of 6.3:1), while the TH400 automatics received the permanent four-wheel-drive QuadraTrac system.

The transfer case was offset, allowing it to sit just above the frame to avoid obstacles, and the chain itself is larger than nearly any other.

[citation needed] A test by Petersen's Complete Book of Four-Wheel Drive reported that the Cherokee was the only vehicle unable to be dynoed because the transfer case would not allow the rear wheels to spin, unlike the other full-time four-wheel-drive vehicles being tested.

[1] Problems with spare parts, quality control, the limited capacity of the assembly plant (a maximum of 60 Cherokee/J20 vehicles per month), and lack of dealer support (many were multi-franchise stores so Jeeps were not their focus) were disadvantages to maintaining market share.

[1] Australian tariff regulations defined "real" 4x4 vehicles as having a separate frame and chassis construction and had a 25% duty and no quota restrictions, while vehicles with an integral chassis were classified as "cars" and subject to both an import quantity restriction and a 57.5% tax.

[citation needed] It was offered with a single type of engine, the locally built Tornado inline-six, and was equipped with 3-speed manual transmission.

Later Jeeps received an updated and more powerful version of this engine with seven main bearings, called the "Torino."