The Mk I GT40 had been built around a 289 cubic inch (4.7-litre) Ford V8 but met with limited results in 1964 and early 1965. In parallel, teams at Holman Moody and Shelby American worked separately to adapt the GT40 chassis to accept the much larger 427 cubic inch "big block" Ford FE engine — the side-oiler unit from the Ford Galaxie used in NASCAR, modified for road-course endurance racing. The modified car was referred to retroactively as the Ford Mk II.
A key change to handle the larger engine was a new Kar Kraft-built four-speed gearbox (known as the KKL-108 or Ford box), which replaced the ZF five-speed used in the Mk I. The ZF unit had already proven marginal for the smaller engine; the big-block demanded something purpose-built. The resulting package gave the Mk II substantially more power than the Mk I at the cost of increased weight, requiring careful management of brake wear and fuel strategy during long-distance events.
The Mk II arrived at the 1966 24 Hours of Le Mans as part of the most ambitious Ford racing effort in the programme's history. Three teams entered Mk II cars: the pairing of Chris Amon and Bruce McLaren (car number 2), Denny Hulme and Ken Miles (car number 1), and Dick Hutcherson with Ronnie Bucknum. All three cars finished, placing 1-2-3 in the overall results and delivering the breakthrough result Ford's chairman Henry Ford II had sought since commissioning the GT40 project.
The finish was not without controversy. Ken Miles and Denny Hulme had built a four-lap lead over the McLaren/Amon car, but a pit stop for brake rotor replacement — caused by the wrong rotors being fitted in a scheduled change, with the correct set taken by the second crew — eroded that advantage in the closing stages. Ford officials arranged for the two leading cars to cross the finish line together in a photo finish. The ACO then determined that the McLaren/Amon car had started slightly further back on the grid, meaning it had technically covered more distance over the 24 hours. McLaren and Amon were declared the winners, with Miles and Hulme classified second.
The 1966 season had already included domination at Daytona, where Mk IIs finished 1-2-3 in the newly extended 24-hour format, and at the 12 Hours of Sebring, where GT40s took the top three finishes. The Mk II also ran at Daytona in 1967 as a Mercury-badged variant to promote that division of Ford Motor Company.
For the 1967 season, Mk II cars were upgraded to "B" specification. The bodywork was revised, removing two roof vents previously used for rear brake cooling and adding a spare wheel at the rear. Twin Holley carburettors replaced the previous setup, yielding an additional 15 PS. However, a batch of improperly heat-treated input shafts in the transaxles caused most Fords to retire at the 1967 Daytona 24 Hours, allowing Ferrari to win 1-2-3 in a reversal of the previous year's result. Mk IIBs also competed at Sebring and Le Mans in 1967 and won the Reims 12 Hours.
By 1967, the Mk II was superseded for the Le Mans programme by the purpose-built Mk IV, which used a different chassis but retained the same 7.0-litre engine. The FIA's 1968 regulation change, which limited sports prototype engines to 3.0 litres — a direct response to the speeds achieved by the 7-litre Fords and 4-litre Ferraris — effectively ended the Mk II's competitive life in top-level endurance racing.
A Mk II that finished third overall at the 1966 Le Mans was sold at RM Sotheby's in 2018 for $9,795,000, at that time the highest price achieved at auction for a GT40. The Mk II's 1966 Le Mans result is depicted in the 2019 film Ford v Ferrari, which chronicles the development of the GT40 and the rivalry with Ferrari that motivated the entire programme.