In 1999, after a five-year hiatus, Ford SVT unveiled the Second Generation Ford Lightning. Powered by a modular SOHC 16-valve 5.4 L Triton, the new engine was capable of producing 360 horsepower (270 kW) and 440 ft·lbf (600 N·m) of torque. This was primarily due to the inclusion of an Eaton supercharger that was factory installed. Behind the engine sat the 4R100 automatic transmission which connected to a rear end housing 3.55:1 rear gears.
The Lightning featured specialized 18" wheels mounted with Goodyear Eagle F1 295/45ZR-18 tires. The Lightning's suspension system, which lowers the truck one inch in front and two inches in the rear, was also modified from the standard F-150. The suspension was largely unchanged for the 2001 Model. It retained the front short-and long-arm system with coil springs and a 31 mm solid stabilizer bar along with the rear solid axle with five-leaf springs and a 23 mm solid stabilizer bar. Monroe shocks were used from 1999-2001 then replaced with Bilstein shocks from 2002-2004.In the 2001 Model Year, the engine design was slightly altered to produce 380 horsepower (280 kW) @ 4,750 rpm and 450 ft·lbf (610 N·m) of torque @ 3,250 rpm. Also, the previously leaky intercooler was redesigned. This problem was addressed as a recall in earlier models. Another engine revision came in the 2003 Model Year when a weakness in the heads, the lack of sufficient threads for spark plugs, was addressed and fixed, although "piston slap", [2001 Ford SVT Lightning engine] a mild knocking noise while the engine is cold, was still present.
At the other end of the drivetrain, the final drive ratio was shortened to 3.73:1 in 2001. Also, in 2001 the drive shaft was increased in size to a 4.5-inch (110 mm) aluminum unit, from the previous 3.5-inch (89 mm) steel unit. The specially developed 295/45ZR-18 Goodyear Eagle F1-GS unidirectional tires were upgraded utilizing a new generation F1 GS rubber compound, improving the tires' grip. With these engine and drivetrain revisions, Car and Driver magazine drove a Lightning from zero to 60 mph (97 km/h) in 5.2 seconds. For 2003, the Lightning's cargo capacity was raised from 800 lb (360 kg). to 1,350 lb (610 kg).
The second generation Lightning was initially offered in just Bright Red, Black, and White paint colors. The 2000 Model Year brought the addition of the Silver color to the lineup. In 2002, True Blue, a very dark blue, was offered, but replaced with a lighter Sonic Blue in 2003. The 2003 Model Year also saw the introduction of the Dark Shadow Gray color. These trucks were manufactured at Ford's Ontario Truck Facility in Oakville, Ontario until its closure.