The 20 Series was upgraded to the now classic 40. Toyota made many production changes by buying new steel presses. Mechanically, the FJ40 was given a new 125 hp, 3.9-liter and the Land Cruiser finally received low-range gearing. The Brazilian model was rebadged the Bandeirante and received a Mercedes-Benz built Diesel engine generating 78 hp.

Global production surpassed 50,000 vehicles. The Land Cruiser was the best selling Toyota in the United States.

Production of the FJ55 began. The FJ55 was a 4-door station wagon version based on the FJ40's Drive-train, repraced 4-Door FJ45V ( I ). It was colloquially known as the "Moose". The FJ55 had a longer wheelbase 2710 mmand was designed to be sold in North America and Australia.

The 100,000th Land Cruiser was sold worldwide.

The 200,000th Land Cruiser was sold worldwide.

The 300,000th Land Cruiser was sold worldwide. The first diesel Land Cruiser was introduced for export on long wheelbase models and it had a six-cylinder H engine.

A four-cylinder 3.0-liter B diesel was offered. The introduction of this engine boosted sales in Japan by putting the Land Cruiser in a lower tax compact Freight-car category than it's 3.9-liter gasoline version.

The 3.9-liter gasoline engine was replaced by a larger, more powerful 4.2-liter 2F unit. The FJ55 received front disc brakes.

United States-version FJ40 Land Cruisers received front disc brakes like the FJ55. The Toyota Land Cruiser Association was founded in California.

The first BJ / FJ40 and FJ55 models were officially sold in Germany with both diesel ( BJ40 ) gsoline engines ( FJ40 /55 ).

United States-version FJ40's were updated this year with a new wider, square bezel surrounding the headlights. Power steering and cooler were offered in FJ40s for the first time. The diesel engine was improved, evolving into the 3.2-liter 2B only in Japan.

The 4th generation 60 series was introduced. While still retaining the rugged off-road characteristics of previous Land Cruisers, the 60 was designed to better compete in the emerging sport utility vehicle market. The 60 was given a variety of comforts like air conditioning, a rear heater and an upgraded interior. The FJ60's gasoline engine was left unredeemed and were added six-cylinder 4.0 litter 2H and four-cylider 3.4 litter 3B diesel engines.

Land Cruiser sales surpassed 1 million and a high-roof version was introduced. The 60 was introduced to South Africa when a stock Land Cruiser competed in the Toyota 1000km Desert Race in the punishing wilds of Botswana.

This was the final year for the 40. Specialist suppliers of aftermarket parts and restorers who return old FJ40s to better-than-new condition replace Toyota dealers as the main source of Land Cruiser expertise.