Introduced in 1996 as a 1997 model, the second-generation Wrangler reintroduced the round headlamps from the classic Jeep models. The main engine was the AMC242 4.0 L inline 6. From the Wrangler TJ onwards, all Wranglers were fitted with coil-spring instead of leaf-spring suspension, the automatic shifter was relocated to the floor.

In 2004, a long-wheelbase "Unlimited" model was introduced. Furthermore, starting in 2006, Israeli Automotive Industries Ltd. produced the first five-door Jeep Wrangler derivative, built under license from Chrysler, for the Israel Defense Forces, based on a 2,931 mm (115.4 in) wheelbase Wrangler (TJ).