In September 1979 a new generation of the S-Class was presented at the Frankfurt International Motor Show IAA. The range of series 126 first comprised seven models. There was a choice of four engines – from the 2.8-liter six-cylinder carburettor engine with 156 hp to the 5.0-liter all-aluminium V8-engine with petrol injection and 240 hp. Furthermore, one could decide between two body variants. Beside the normal version there was a prolonged variant as had been offered for generations in the upper-class saloons. This time the enlargement of the wheelbase with 140 mm was more remarkable than usual. As always it all was of benefit to the passenger leg room and the entrance width of the rear doors.
Important goals in the development of this new series were next to a higher driving comfort and safety the reduction of energy consumption. Using weight reduced materials and a less air resistant body, optimised in the wind tunnel, helped the new S-Class to reduce its fuel consumption by 10 % in comparison to its preceding models. The two eight-cylinder engines of the previous series were replaced by two redesigned units with enlarged displacement and all-aluminium block. The 5.0-liter engine which took the place of the 4.5-liter grey cast iron aggregate was already known from the 450 SLC 5.0. The 3.8-liter all-aluminium engine had been developed after the example of the 5-liter engine from the time tested 3.5-liter V8 with grey cast iron block. Due to their higher power with reduced weight the new V8-engines made a better driving performance combined with a more economic fuel consumption possible. The carburettor and injection version of the 2.8-liter six-cylinder aggregate remained unchanged in the program.
Of series 126, too, a Diesel version was produced for export to the USA. As its predecessor, Type 300 SD was also provided with a supercharged 3.0-liter five-cylinder engine. Its performance, however, was increased by 10 hp to 125 hp. The layout of the vehicle basically corresponded to the previous models. The new S-Class saloons, too, were equipped with a semi-trailing arm rear axle as well as a twin control-arm front wheel suspension with zero steering offset. The body had been constructed according to the newest insights into safety research. Thanks to new construction principles the passenger cell now also remained unharmed at an offset impact at a collision speed of 55 kph. World wide the 126 series saloons were the first series vehicles fulfilling the criterion of an offset crash.
The characteristic design elements of the new S-Class present themselves more in the lower zones. For the first time a Mercedes-Benz car hat no classical bumpers any more. In stead, there were generously dimensioned plastic-coated bumpers seamlessly integrated into the front and rear apron. Broad side protection strips formed an optical link between front and rear apron, placed at the height of the bumpers between the wheel cut-outs.
In autumn 1981, two years after its debut, series 126 was completed by an elegantly designed coupé version shown at the Frankfurt Motor Show IAA. The car was only available with an eight-cylinder engine. Within the „Mercedes-Benz Energy Concept“ for reducing consumption and pollutants, presented at the same time, the two V8-aggregates had been thoroughly redesigned. Next to an increase of compression, a camshaft with changed timing, air-circulated injection valves and an electronic idle-speed control device stood on the list of improvements. Due to the changed cam shift adaptation the torque maximum could be shifted towards lower numbers of revolution. In case of the 3.8-liter engine it was even increased. This aggregate was thoroughly changed. In order to obtain a more favourable volume-surface ratio the bore was reduced and the stroke increased. Thus the modified 3.8-liter V8 showed a slightly increased displacement. In both eight-cylinders slight power reductions had to be taken into account compensated, however, by a considerably improved economic efficiency. In both cases the rear axle transmission ratio was adapted to the changed characteristics of the engine. The two six-cylinder engines were also changed in a number of details, thus also achieving some economising effect. The power potential, however, was not affected by these measures.
Like with the preceding 116 series, the eight-cylinder versions of the 126 series were offered as armored vehicles. The protection technology could be further perfected through intensive development work. Overall, a considerable number of 1,465 units were produced. Two vehicles of the type 500 SEL stood out, they were construed with a wheel-base that was 200 mm longer and a roof that was 30 mm higher. The first exemplar, which was finished in January 1983, added a further representation vehicle to the in-plant car pool. The second was built after the desires of the Vatican for the Holy Father and delivered to Pope John Paul II. in August 1985.