The Karmann Ghia models were significantly redesigned for the 1960 model year with the headlights raised two inches to meet international regulations and larger vents in the nose, with multiple grille bars. U.S. models also gained double-decker bumper guards and would keep these until safety bumpers were introduced. Many Karman Ghias have been hit in the projecting nose at some point and aftermarket grilles were sold during the 1960s to protect the prow. Eventually the problem was ameliorated somewhat by hefty Beetle-style bumpers in 1972.

Interiors were now two-toned with an armrest on the right-hand door and a heavy insulation pad on the engine firewall. The rear lights were also enlarged and rounded, turn signals were now self-canceling, the dashboard was padded and a grab handle added for the passenger. Rear windows hinged open in the Coupe.

Both Coupe and Convertible continued with the 30 bhp, 1,192 cc air-cooled flat four-cylinder engine found in the Beetle. The transmission was a 4-speed with crash first gear, brakes were four-wheel drums and the fuel tank capacity was 10.5 gallons, with one-gallon reserve.

Sales climbed to 19,249 Coupes and 5465 convertibles. The Coupe cost $2,430 and the Convertible sold for $2,695.

New Convertible colors were introduced in August 1959 and ran until July 1960. They included Black, Pearl White, Platinum Gray, Sea Blue, Malachite Green, Paprika and Ferrite Brown.