Four years after the debut of the 'Energy Concept', the model range underwent extensive refinements, and so in September 1985, again at the Frankfurt show, a completely revised S-Class range was introduced. In addition to a subtle facelift, which mainly altered the appearance of the bumpers, side skirts and wheels, the emphasis was on a restructured engine line-up.
Two newly-designed six-cylinder units, which had been premiered nine months earlier in the mid-range W 124 series, now replaced the trusty 2.8-litre M 110 DOHC engine. In the place of the carburettor version came a 2.6-litre direct injection unit, while the 3.0-litre unit – which had been developed in parallel – succeeded the injection variant of the M 110. Another new addition was the 4.2-litre V8 engine, a rebored version of the old 3.8-litre unit which it now replaced in the S-Class saloon, SEC coupé and SL. The 5.0-litre engine was also modified. Now equipped with an electronic ignition system and the electro-mechanically controlled KE Jetronic injection system from Bosch, it delivered 245 hp.
The most spectacular innovation in the engine range was a 5.6-litre eight-cylinder unit, which was developed by lengthening the stroke of the 5.0-litre V8 and which unleashed an output of 272 hp. If required, an even more highly compressed version was also available that delivered a mighty 300 hp, although it was not possible to combine this unit with a closed-loop emission control system. But even without a catalytic converter this 'ECE version' met the emissions standards stipulated by the Economic Commission for Europe. The models fitted with this engine variant – the 560 SEL and 560 SEC – were, in their day, the most powerful Mercedes-Benz production cars ever built.
All variants in the revised model range – with the exception of the 560 SEL and 560 SEC in the ECE version – were available on request with a closed-loop emission control system with three-way catalytic converter. In each case the series version was the 'catalytic converter retrofit version', for which the vehicle was delivered without catalytic converter and oxygen sensor, but with the multi-functional mixture preparation and ignition system. These retrofit versions could be fitted with the closed-loop catalytic converter without difficulty at a later date. This gave customers maximum flexibility in choosing the time to convert their vehicle – a not insignificant advantage, given that unleaded petrol was not universally available at the time. From September 1986, the closed-loop catalytic converter was standard equipment on all Mercedes-Benz passenger car models with petrol engines; the retrofit versions were available until August 1989 – with a corresponding price discount.
With the introduction of the new model range, the diesel model – which was still reserved exclusively for US export – was replaced by a modified variant. The new 300 SDL was presented with the additional space of the long version and featured an entirely new design of engine. This was based on the 3.0-litre six-cylinder unit familiar from the mid-range 124 series, although this too was equipped with a turbocharger. The six-cylinder turbodiesel now delivered 150 hp – 60 hp more than the basic version without supercharger and almost 30 hp more than the five-cylinder engine of the predecessor model.
As was expected, the running gear of the facelifted models displayed no fundamental modifications. Nevertheless, a few details of the rear axle design were modified in order to improve ride comfort and reduce engine noise. In addition, all models in the 126 series were now fitted with 15-inch wheels and larger brakes to match. The design of the optional alloy wheels – these were standard equipment only on the 560 SEL and 560 SEC – had been updated to match those of the compact-class and mid-range model series.
The other stylistic modifications that had been carried out on the improved models of the 126 series not only served to update the design, but had also been integrated for specific technical reasons. By lowering the aprons it was possible to further reduce front axle lift forces and improve airflow at the rear. This also had the effect of further enhancing directional stability and road adhesion when moving at speed, an aspect of considerable importance with respect to the performance of the new top-of-the-range 560 SEL.
The lateral protective strips were now smooth in design rather than grooved, and like the bumper system they reached down lower and included additional trim on the frame side members. Because the 5.6-litre models – unlike their lower-powered sister models – came with wider 215/65 VR 15 tyres as standard, the front wing and wing beading were modified in shape in order to create the necessary lateral clearance for the front wheels.
In September 1987, to counter the unusually robust challenge to the S-Class provided by the BMW 750 i – higher-performance variants of all V8 engines were introduced. Compression ratios in all cases were increased to 10:1, and additional measures were taken to improve performance by between 6 and 10 percent depending on the model. The effect was even clearer in variants with catalytic converters. By optimising the emission control equipment, the designers succeeded in significantly reducing power loss due to the catalytic converter. The ECE version of the 5.6-litre V8 was discontinued without a replacement, since as a result of the treatment to increase output the catalytic converter retrofit version was now also capable of developing 300 hp.
At the Paris Motor Show in September 1988, the model range was expanded to include the 560 SE from the 126 series, thus making the 5.6-litre engine available in a saloon with conventional wheelbase.
From April 1990 (pre-production batch having started in June 1989), a new variant with diesel engine was produced, although this too was only available in the USA. Production of the previous 300 SDL had already come to an end in September 1987. The 350 SDL model had a new 3.5-litre six-cylinder engine that had been developed by increasing the bore and stroke of the trusty 3.0-litre unit. The new turbodiesel was designed more for torque than power and, with exhaust gas recirculation and oxidation catalyst, had a shortfall of 14 hp on its predecessor in spite of the larger displacement. But the 350 SDL's 136 hp was more than adequate, especially given the speed limits that applied throughout the USA. Maximum torque was increased by almost 15 percent and was reached at just 2000 rpm. In June 1990 the 350 SD with a conventional wheelbase was introduced to go alongside the 350 SDL.
As was the case with the preceding 116 series, the eight-cylinder 126 models were also available as armoured variants. Protection design had been further perfected after intensive development work and a total of 1,465 units were produced.
As successors to the 126 series, eight 140 series saloons were introduced at the Geneva Motor Show in March 1991. Although the new models went into production only a month later, the plant continued, for a while, to turn out saloons of the 126 series for export. Production of most variants came to an end between August and October 1991, although the last few armoured models did not come off the production line until April 1992. During the entire twelve-year production period a total of 818,036 saloons left the production lines in Sindelfingen, 97,546 of them with diesel engines. That made the 126 the most successful premium-class series in the history of the company.