For the 1996 model year, the Cougar was once again on a new 2-year cycle. The Ford Thunderbird was also freshened, and the two cars shared some common exterior parts. A new front end, very similar to the Mustang, was sculpted, with a new grille. The hood and headlights were also new, and they were identical to the T-Bird's. The headlights became clear with the "jewel-look" multi-faceted reflectors. A new rear bumper had a slightly different look as well. The side moldings were gone, replaced with a thick lower body cladding. Also, some bright trim was added to break up the body lines a bit. The door handles were given a new body-color surround. New 15" wheels (finally!) were added to the line-up. The "V8" badge was now gone. New colors rounded out the list of exterior changes. The standard 3.8 V6 got a horsepower boost, now up to 145. The optional 4.6 SOHC V8 remained at 205 hp. It did, however, receive a new upper intake manifold that helped bring peak maximum horsepower at a lower RPM and increase peak torque a bit. All other mechanicals remained essentially unchanged.

The interior remained largely unchanged. New paisley seat patterns emerged, and combination cloth/leather seats were popular. Note that the dash is now all one color, as opposed to the two-tone dashes of the 1994-95 models.

Still the rumors persisted about the demise of the MN12 platform. Sales were definitely falling off, and Ford saw that any further investment in this chassis would not yield the benefits they'd hoped. Sometime during the 1996 model year, the green light was given to the front-drive successor to the Cougar, said to be on the new Contour/Mystique/Mondeo platform. At one point, it was not sure if the 1996 model year would be the last for this generation Cougar. But Ford decided that for its 30th anniversary, the Cougar name would live on for one more model year in rear-drive form.