In late 1999, the W220 was introduced. The W220 S-Class was completely restyled, with a body that was slightly smaller and lighter than its predecessor. Unlike its predecessor, the W220 was not the first model to feature the company's new design theme for the next generation of Mercedes-Benz. This honor was given to the A-Class when it launched in 1997. The new S-Class incorporated the new styling cues first introduced on the Mk I A-Class the year before (for example, the dashboard carried over the new styling details first seen in the A-Class). Despite being smaller, the W220 S-Class offered more interior space than the W140. Production of the W220 S-Class totaled 485,000 units, slightly more than the production totals from the W140.

As with each new S-Class, the W220 brought in new innovations such as Airmatic air suspension and Active Ventilated Seats (which used miniature fans in the seats to move air through perforations). A navigation system with center console-mounted screen display was introduced, along with the COMAND input control system. Other options included keyless entry and ignition, a radar-controlled Distronic cruise control system and a cylinder shut-off system called Active Cylinder Control. The 4MATIC all wheel drive system was introduced to the North America market S-Class for 2002.

Consumer Reports classified the W220 model's reliability as "poor," its lowest rating, and declared it one of the "least reliable luxury cars."[11] Build quality, however, was generally considered to be good. For instance, Forbes described the W220 S500 as "built remarkably well." [12] Early W220s were recalled for issues with the trunk spring and the hydraulic fuel line; there were no recalls for the 2005 or 2006 model years.

In 2002 Mercedes introduced the worlds first preemptive safety system on the W220 with its first iteration of Pre-Safe.

In 2003, the W220 S-Class received an exterior refresh with updates to the front fascia. The grille angle was adjusted to a slightly more upright position, and the xenon-discharge lheadamps were given a new transparent housing, replacing the earlier opaque versions. The front bumper's lower air intakes were also restyled. In 2005, the S-Class was the first vehicle to receive a TUV Institute environmental certificate from the German Commission on Technical Compliance for environmentally friendly components.[13]

Engines

The W220 was available with more engine options than the W126 or W140. The range started with smaller 3.2L 224 hp V6 motor, which was superseded by an enlarged 3.7L 245 hp V6 in the S350. The S430 was powered by a 4.3L 279 hp V8 and the S500 was powered by a 5.0L 306 hp V8. The S55 AMG was outfitted with a supercharged 5.4L 493 hp V8 motor, the S55 AMG 2000/2001 was outfitted with the naturally aspirated 5.4L 367 hp V8 motor. The S600 was outfitted with a 5.5L 493 hp V12 twin turbo engine.

For one month in 2001, AMG produced the S63 AMG, which was sold in very limited numbers. The S63 was powered by a 6.3L 444 hp V12. An undisclosed number of were sold exclusively through AMG in European and Asian markets. The S65 AMG was introduced in 2005. Powered by a 6.0L 612 hp V12 twin turbo motor, the S65 was the most powerful S-Class, as well as the world's most powerful five-seat sedan. The S65 had a 0 – 60 mph time of 4.2 seconds and could reach 100 mph under 9.0 seconds.