The 260Z engine was enlarged with a longer stroke to 2.6 L 1974. A 2+2 seating option added. This engine was sold in the United States for the 1974 model year only, but was available in other countries until 1979. In the US, federal emissions regulations forced a reduction in ignition timing and compression ratio, resulting in a lower power output (140 hp) despite the additional displacement, whereas in other countries the power output actually increased to 162 bhp. A 3-speed automatic transmission. was an option to the standard 4-speed manual.

There were Two models of the 260Z sold in the U.S. The first half had lower power due to Emissions regulations. The full power version was available during the second half of production destined to the U.S. market. Some regard the first half of 260Z's as the least desirable of the two models, because of the reduced performance. The 260Z also claimed a few improvements over the 240Z. The climate controls were more sensibly laid out and easier to work. There was additional stiffness in the chassis due to a redesign of the chassis rails which were larger and extended further back than in the 240Z. The American model also featured heavier, safer, impact-absorbing bumpers.Cosmetic changes included a redesigned dashboard and console, seat trim, and door panels for the interior, as well as redesigned rear tail lights.