Classic Mustang shifters are the proverbial broomstick in a barrel-sloppy, ineffective, and forget speed shifting unless you like missing gears. Think of a classic Mustang shifter as an engineering mishap where the bean counters won out over engineers to keep per unit costs down. But is it really as bad as all that?
Yes. Classic Mustang three-speed and four-speed shifters were designed to function smoothly for five to seven years and roughly 100,000 miles-and most didn't last that long. It isn't that these mechanical wonders will leave you on the roadside. They work even when they're shot to pieces. They just feel terrible in your hand where it's challenging to find a gear. Sometimes, they will jam and leave you stuck in gear. That's when you either crawl underneath to bang them free or call for a wrecker.
The Mustang's three-speed...
The Mustang's three-speed shifter is simple in scope and operation. The shifter handle moves the spring-loaded selector shaft from right to left depending on which side of the H-pattern you're seeking. A tang, or straight shaft, pressed into the selector shaft moves shifter levers and rods fore and aft to engage First and Reverse when the inboard lever is tanged. When the outboard (left) shifter lever is tanged, we have Second and Third gear. The inboard lever moves the First/Reverse rod while the outboard lever moves Second and Third.
The good news with these shifters is that they are easy to repair and adjust. You just have to stay on top of them with regular preventative maintenance. Their greatest enemies are dust, dirt, and crud, which is what makes them malfunction. Mustangs Etc. has everything you need for restoring manual shift performance. Remanufactured three- and four-speed shifters with fresh plating and new parts are also available from Mustangs Etc.
Classic Mustang shifters are spring-loaded, sliding selector shaft mechanisms that get their direction from a bolt-on shifter handle. They get sloppy when the shifter handle cups and buttons wear out and fall out, which is what makes them loose and sloppy. Shifter cups are two 1/2-inch buttons (three-speed) or cups (four-speed) that ride on each side of the shifter housing when you're in each side of the H-pattern. Think of them as shifter handle bushings. They give your shifter handle something to bear against when you're searching for a cog.
It is important to note the shifters we're addressing here are '65-'68 three- and four-speed shifters only. There isn't much difference between three- and four-speed shifters. Aside from the additional Fourth gear and Reverse lockout functions, these guys are virtually the same. For '69, Ford tried to copy the legendary Hurst shifter without much success on both three- and four-speed. In 1970, Ford switched to the Hurst shifter for high-performance Mustangs through '73.
In your search for Ford shifter parts, you will find many variations out there from all Ford carlines. Some interchange. Some do not. The greatest weak spot in these shifters, aside from cups and buttons, is the U-shaped trunnion casting that the shifter handle attaches to. With abuse, these trunnions tend to crack and break. You're going to want to inspect yours for cracks or evidence of any welding. If you find either, toss it.
We're going to walk you through the rebuilding process along with proper adjustment that will make your Mustang driving experience rewarding.

Shifter rods are disconnected...

Shifter rods are disconnected by removing the cotter pins or retaining nuts.

Shifter handle is removed...

Shifter handle is removed via two bolts and a 1/2-inch socket.

Shifter assembly is removed...

Shifter assembly is removed by pulling the three bolts that secure it to the transmission tailshaft housing.

Here are three- and four-speed...

Here are three- and four-speed shifter assemblies side by side so you can see the differences. The three-speed shifter on the left has two shift levers. The four-speed shifter on the right has three. The shifter housing is basically the same. What makes the assembly different is one additional path beyond the basic H-pattern for Reverse gear and the corresponding lever.

Disassembly begins at the...

Disassembly begins at the return spring with the removal of the C-clip and washer to release the spring.

The retainer is removed next...

The retainer is removed next using a 1/2-inch socket to release the shift levers.

The thrust washer is removed...

The thrust washer is removed next, which is what the shift levers bear against.

Shifter levers are next, one...

Shifter levers are next, one at a time. The first outboard shift lever removed operates Third and Fourth gears.

This longer inboard shift...

This longer inboard shift lever operates First and Reverse.