The second-generation M-Class (W164) moved to a unibody platform while sharing most components with the GL-Class, which sports a longer body to accommodate third-row seating.

For a short time, between 1999 and 2002, the W163 M-Class was also built by Magna Steyr in Graz, Austria, for the European market, and the W166 M-Class from 2011 to 2015 was built in Stuttgart for the European and Australian market, before all production moved to the U.S. plant near Vance, Alabama in 2015 with the release of the facelifted W166 model, in an effort to harmonize Mercedes-Benz SUV nameplates by aligning it with the E-Class.

Although grouped under the "M-Class" naming banner since the first launch, BMW, who sells M models such as the M3, objected to the car being badged "M" with the three-digit engine level afterwards (e.g. M 320).

[4][5] From 2015, with the release of the facelifted W166 third-generation model at the New York Auto Show in April, the M-Class was renamed to GLE as per the revised nomenclature adopted by the brand.

A joint agreement with Mitsubishi Motors to develop and produce a sports-utility vehicle was made in early 1991 and was confirmed publicly that June.

In July 1996, construction on the Mercedes-Benz U.S. International plant in Vance, Alabama concluded, with the very first production M-Class rolling off the assembly line the week of 9 February 1997.

[12] Mercedes-Benz launched the first generation W163 series M-Class on 19 February 1997, in the United States for the 1998 model year, with sales beginning that September.

The Mercedes-Benz M-Class (W163) was available with permanent 4Matic four-wheel drive, which routed torque to all four wheels through open front, center, and rear differentials.

[13] The system used a two-speed dual range BorgWarner 4409 transfer case with a planetary center differential that provides a 48% front/52% rear default torque split.

Furthermore, the M-Class boasted front- and side-impact airbags with advanced occupant detection for the front passenger seat, which helped earn the W163 the highest marks in insurance industry crash tests.

Manufactured in Vance, Alabama, in the United States, the M-Class launched in the North American market first as the ML 320.

Two are displayed at the Universal Studios in Orlando, Florida, there is one at the Mercedes-Benz Museum in Stuttgart, Germany, and one at the Visitor Center at the M-class factory in Alabama.

It also received the World Car Award in March 1999, voted by an international jury of automotive journalists in Geneva.

[14] Despite the accolades, Mercedes-Benz received considerable criticism with respect to the substandard quality of the W163, resulting in the car being nicknamed Alabama Trashcan.

Styling updates involved the fitment of new head- and tail-lamp lenses, front and rear bumpers, new alloy wheels on most variants, the relocation of the side turn signals from the fenders to the side-view mirrors, and various interior trim changes.

[19] In 2002 the design styled by Steve Mattin under Peter Pfeiffer was chosen and approved by the executive board.

Mercedes-Benz extensively publicised the US$600 million spent to update its factory and add manufacturing space for the new R-Class.

New features in the 2006 M-Class include the 7G-Tronic seven-speed automatic transmission, optional Active Curve-Illuminating Bi-Xenon headlights which "steer" in the path of the vehicle, and an adjustable-height air suspension.

These features made the ML 63 AMG the most powerful naturally aspirated V8 SUV in the world at the time of its launch.

The vehicle had cosmetic changes, including specially-manufactured 22-inch 10 spoke wheels, black leather with white stitching, and smokers package with Grand Edition modeling.

The Grand Edition was offered in Midnight Blue, Black, and Ivory White, differentiating the basic model by colour already.

New features in the 2012 M-Class include an updated 7G-Tronic Plus seven-speed automatic transmission to provide improved fuel economy, optional adaptive cruise control (Distronic Plus), active lane departure warning system, and an adjustable-height air suspension (AirMatic).

DaimlerChrysler developed the core platform and technology, benefitting from Chrysler's strong SUV sales and R&D domestically.

The package adds a two-speed dual range Magna Powertrain transfer case with center differential lock, reduction gearing, underbody skid plates, and a 6-mode selectable terrain driving program system.

The Mercedes M-Class won first place in the "Luxury Crossover SUV" category and has been named the most ideal vehicle for Americans based on a study undertaken by California-based automotive research and consulting firm AutoPacific.

[33] Mercedes-Benz India established a manufacturing plant in Chakan, Pune in early 2009[34] that rolled out the first W166 M-Class to be built outside the US in October 2012.

[38] The C292 coupé was unveiled to the public in January 2015 at the North American International Auto Show, it was discontinued in August 2019 after the introduction of the W167.

The range is topped by the Mercedes-AMG GLE 63 S-Model, powered by 5.5-litre twin turbo V8 producing 585 bhp and 768 Nm of torque,[42] making it one of the quickest in its segment.

[54] The GLE 450 features a refined Active Body Control system, that does away with mechanical roll bars, notably enhancing performance.

In March 2024, Mercedes-Benz recalled over 116,000 GLE and GLS cars, built from 2019 to 2024, due to a loose 48-volt ground cable that may not have been tightened properly during assembly.