The cars from 1965 to 1966 were the smallest and lightest of the GT 350. These cars are often referred to as the "Cobras," which was Ford's AC-based two-seater sports car, also produced by Shelby American during the same period. . Both models use the Cobra emblem, similar paint scheme, and optional "Cobra" valve covers on many GT350s that were part of a Shelby marketing partnership, as well as one of its iconic symbols.

All 1965-66 cars had the 279 hp (4.7 L) HiPo K-Code 271 hp (202 kW; 275 hp) V8 Windsor V8 engine, modified with a large 4-barrel Holley 715 CFM carburetor to produce 306 hp ( 310 hp; 228 kW) at 6,000 rpm and 446 Nm at 4,200 rpm torque.

Marketing literature referred to this engine as the "Cobra Hi-Riser" due to its high lift intake manifold. Starting as a stock Mustang with a 4-speed manual transmission and 9 "live rear axle, the cars were shipped to Shelby American, where they received the loud laugh collectors, Tri-Y headers and received larger Ford Galaxie rear drum brakes with metal coatings and Kelsey-Hayes front disc brakes.

The 1965 GT350 is not built for comfort or ease of driving. There were 34 "GT350R" race cars built specifically for use in competitions under SCCA rules, and the model was the B-Production champion for three consecutive years.

The 1966 GT350 was more comfortable for casual drivers, including rear seats, optional colors and an optional automatic transmission. This trend of more options and luxuries continued over the next few years, with cars becoming progressively larger, heavier and more comfortable, losing much of their competitiveness in the process. The 1969 GT350s and GT500s were largely modifications of Mustang style. In 1969 Carroll Shelby was no longer involved in the Shelby GT program, and the project was done internally by Ford.

The 1965 and 1966 GT350s were delivered from Ford's San Jose white-body assembly plant for modification by Carroll Shelby's operation, originally at Venice Beach and later at Los Angeles International Airport. San Jose cars carried an "R" in the Ford VIN, denoting that facility. The only year the 1960s Shelby Mustangs came from another factory was in 1968, from where they came from New Jersey, "T" in VIN, and were modified by A.O. Smith.T

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