Unveiled at Detroit, MI Cobo Hall on June 16, 1998, the redesigned WJ 1999 Grand Cherokee shared just 127 parts with its predecessor (mostly fasteners) and took 28 months to develop from its March 1996 design freeze (styling approval in Q3 1995). The spare tire was relocated from the side of the cargo compartment to under the floor. The two heavy pushrod V8 engines were replaced by Chrysler's then-new PowerTech. New V8 engine produced less torque than the old pushrods, but was lighter, offered better fuel economy, and provided similar on road performance figures (the 23-gallon fuel tank was replaced with one of a 20.5-gallon capacity). The Inline 6 engine was also updated for MY1999. A redesign of the intake manifold added 10 horsepower (7.5 kW). While other Jeep vehicles used the Mopar 5 x 4.5 bolt circle, this was the first Jeep following the 1987 Chrysler buyout to receive a wider wheel bolt pattern: – 5 x 5 - (metric 5 x 127mm).

A notable feature available in this generation was the automatic four wheel drive option called Quadra-Drive, which employed the New Venture Gear NV247 transfer case. This two-speed chain-driven transfer case uses a gerotor, a clutch pack coupled to a hydraulic pump, to transfer torque between the front and rear axles. The transfer case contains three modes, 4-All Time, Neutral, and 4-Lo. In 4-All Time, 100% of torque is sent to the rear axle in normal conditions. If the rear axle starts spinning at a higher rate than the front axle, hydraulic pressure builds up in the gerotor and causes the clutch pack to progressively transfer torque to the front axle until both axles return to the same speed. Neutral mode is intended for towing the vehicle. In 4-Lo, the front and rear axles are locked together through a 2.72 reduction gear ratio. The NV247 transfer case is mated to front and rear axles containing Jeep's Vari-Lok differentials. Vari-Lok differentials also use a gerotor to transfer torque between the wheels on either side of the axle. The major advantage of Quadra-Drive was that the combined transfer case and progressive locking differentials in each axle could automatically control traction between all four wheels. However, only the center differential could be permanently locked, and only in 4Lo. The Quadra-Trac II system included the NV247 transfer case with the standard open front and rear differentials.

The 45RFE and 545RFE automatic transmission in the WJ was notable. It included three planetary gear sets rather than the two normally used in a four-speed automatic. This gave it six theoretical speeds, and it would have been the first six-speed transmission ever produced in volume, but it was programmed to only use five of these ratios. Four were used for upshifts, with a different second gear for downshifts. Although five of the six ratios were used, Chrysler decided to call it a "4-speed automatic". In 2001, the programming was changed to make use of all six ratios. Rather than have six forward gears, the transmission was programmed to act as a five-speed with the alternate second gear for downshifts. The rpm at 70 miles per hour (110 km/h) on a 545RFE is 2000 rpm, 200 rpm less than the 45RFE programming. 1999 and 2000 model year WJ owners can have their 45RFE transmission's programming flashed to enable the extra gear as both transmissions are physically the same. The 42RE 4-speed automatic remained the transmission for the Inline 6 engine. It had slight changes from the previous model Grand Cherokee.

The interior was also completely redesigned. The redesign allowed for larger rear doors, and more space for rear passengers. Controls for various items like headlights, heated seats, and rear wiper were moved to more convenient locations. The electronic Vehicle Information Center was moved from below the radio to above the windshield, and was standard on all 2000 and up models. Limited models included automatic dual-zone climate control. A 10 CD-Changer was also available with the Infinity Audio package.

In addition to Jeep's UniFrame construction, Daimler Chrysler partnered with Porsche to further strengthen the frame.[citation needed] This was done to reduce NVH (noise, vibration, and harshness). UniFrame is an unusual construction scheme, it incorporates all of the strength and durability of a body-on-frame construction into a unitized construction. By adding stiffness and rigidity to the structure, they enhanced the ride and strengthened the network of steel beams, rails and pillars (or "safety cage") that surround and protect occupants. More than 70 percent of the underbody is high-strength steel. All Jeep Grand Cherokees feature UniFrame construction.

The Grand Cherokee received a secondary minor facelift for 2004 including round fog lamps, a lower front fascia and a new body-color matched inset grille design.

The first-generation Jeep Grand Cherokee (ZJ) offered many new and class-exclusive features, and the second-generation Jeep Grand Cherokee WJ continued to offer new features that were not yet available on its competitors, such as the Chevrolet Blazer and Ford Explorer.

At the time of its release, the all-new 1999 Jeep Grand Cherokee WJ had many standard and optional features which were class-exclusive. HomeLink allowed the driver to program up to three devices such as garage door openers, estate gates, and other controlled access devices and operate those devices with buttons located in the overhead console. A state-of-the-art automatic dual-zone climate control system used infrared sensors located in the climate control panel to monitor the surface temperature of both driver and front passenger to automatically control the interior temperature for both front passengers. The Jeep Memory System allowed for two drivers to set their individual driver's seat, side mirror, and radio setting by using buttons located on the front driver's door interior panel to recall their preferred settings at the touch of a button, or upon insertion of the corresponding key into the ignition (the keyless entry remotes were color-coded either black or gray, and had either a '1' or '2' on the back of the remote to help the drivers easily identify their remote).

In 2002, the Jeep Grand Cherokee WJ added even more new features. These new features included power-adjustable foot pedals via a switch located on the driver's side near the steering wheel (the pedals also worked in conjunction with the Jeep Memory System to adjust automatically to a driver's preferred settings when a button on the front driver's door interior panel was depressed). Optional SRS Side Curtain Airbags for the front passengers were available on all Grand Cherokee models for added protection. The Uconnect hands-free Bluetooth telephone system allowed the driver to pair his or her Bluetooth-enabled cellular phone to the system and make and receive hands-free telephone calls without having to handle their phone, and the driver could even store frequently-called telephone numbers in the system's memory for automatic dialing via voice. The button panel for the system was located on the front driver's door interior panel. Sirius Satellite Radio was also available for the first time regardless of factory radio option. The Jeep Grand Cherokee was one of the first vehicles to offer these features from the factory.

The Laredo served as the base Grand Cherokee trim level from August 1998 to 2004, and still continues to be the base Grand Cherokee trim level to this day. A very well-equipped model, the Laredo offered these features as standard equipment: the 4.0L Power-Tech Inline Six-Cylinder (I6) engine, a 4-speed automatic transmission, sixteen-inch (16") alloy wheels, an A/M-F/M stereo with cassette and CD player (1998-2001) or CD players (2001-2004), wood interior trim (1998-2000) or aluminum interior trim (2000-2004), keyless entry, power windows and door locks, cloth seating surfaces, air conditioning, a split-folding 60/40 rear bench seat, gray-painted front and rear bumpers and body-side cladding trim panels, and more. After MY1999, the Laredo 26D Package was dropped, leaving the Laredo 26E/28E Packages as the base Grand Cherokee packages, and adding a standard overhead Electronic Vehicle Information Center (EVIC/VIC) and overhead console. Many features that were available on the luxurious Limited trim could also be optioned on the base Laredo trim. For 2001 only, a New England Special Group was available for Grand Cherokees equipped with the 26E Package. The package, which was indicated by the sales code ACJ, added features to the base model Grand Cherokee such as P235/65R17 BSW all-season performance tires, seventeen-inch (17") sport alloy wheels (both options of which were also available with the 26S and 28S Packages), an A/M-F/M stereo with cassette and CD players with integrated remote CD changer controls, and a 3.73 rear axle ratio. The New England Special Group was available exclusively in select Northeastern states.

The Limited served as the top-of-the-line Grand Cherokee trim level from 1998 to 2001, and the more "luxurious" Grand Cherokee trim level from 2001 to 2004. It added these features: color-keyed body-side trim cladding panels and front and rear bumpers, a premium 180-watt Infinity Gold stereo system with 6 speakers, leather seating surfaces, dual power front bucket seats, a full-sized spare tire and spare wheel, a security alarm, a leather-wrapped steering wheel, steering wheel-mounted remote audio system controls, driver's 2-position memory (color-coded keyless entry remotes), wood interior trim, and more.

The Sport was the lowest-priced trim level of the Grand Cherokee was introduced in November 2001, for MY2002. Offered only for 2002, the Sport was aimed at value-oriented customers who wanted a very well-equipped vehicle at a modest price point. It added these features to the base Laredo trim: dual power front heated bucket seats, leather seating surfaces, an A/M-F/M stereo with cassette and CD players, a premium 180-watt Infinity Gold audio system with 6 speakers, a full-sized spare tire and spare wheel, a 'sport' emblem on the tailgate, a security alarm, a power sunroof, and more. Cloth seating surfaces, deleted heated front bucket seats, a deleted cassette player, and a deleted sunroof could be had for credit in place of the standard options they replaced.

The Special Edition was a value-oriented trim level of the Grand Cherokee in 2002 and in 2004 (the model was put on hiatus for the 2003 model year). Based on the base Laredo trim, the Special Edition added these features: a full-sized spare tire/wheel, heated power dual front bucket seats, leather seating surfaces & leather-wrapped steering wheel, an A/M-F/M stereo with cassette, CD player, 10 disc rear mounted CD changer, color-keyed body-side cladding panels and front and rear bumpers, a security alarm, power sunroof, and 'Special Edition' emblems on both front doors (the 2004 model did not have heated power dual front bucket seats, leather seating surfaces & leather-wrapped steering wheel", only power seats. The power sunroof was an option)

The Freedom was a value-oriented trim level of the Grand Cherokee between March 2003 (SOP 2003/03/10) and 2004. Based on the base Laredo trim, the Freedom added these features: a full-sized spare tire and spare wheel, seventeen-inch (17") graphite-finished alloy wheels, unique cloth seating surfaces, dual power front bucket seats, an A/M-F/M stereo with cassette and CD players, a premium 180-watt Infinity Gold audio system with 6 speakers, and 'Freedom' emblems on both front doors.

The Columbia Edition, launched in November 2003 (2003/10/06 SOP) was a partnership between Jeep and sportswear manufacturer Columbia for MY2004. Based on the base Laredo trim, the Columbia Edition added these features: a full-sized spare tire and spare wheel, seventeen-inch (17") alloy wheels, unique two-toned cloth seating surfaces, dual power front bucket seats, an A/M-F/M stereo with cassette and CD players, a premium 180-watt Infinity Gold audio system with 6 speakers, Bright Silver Metallic-painted body-side cladding panels and front and rear bumpers, and 'Columbia Edition' emblems on both front doors. Columbia Edition buyers also received a complimentary Columbia parka at the time of delivery of their new vehicle.
4.7 V8 Powertech engine Jeep WJ

The Overland was the top-of-the-line Grand Cherokee trim level between August 2001 and 2004, first introduced for MY2002. It added these features to the already-luxurious Limited trim level: an A/M-F/M stereo with cassette and CD players, a ten-disc remote rear-mounted CD changer, unique seventeen-inch (17") chrome-plated alloy wheels, unique leather-and-suede seating surfaces, dual power heated front bucket seats, a matching spare wheel, 'Overland' emblems on both front doors and the tailgate, a power sunroof, and the higher-output 4.7L Power-Tech V8 engine, which could also be had on the Limited trim.

The 60th Anniversary Edition was manufactured to commemorate Jeep's 60th anniversary in 2001. It added these features to the luxurious Limited trim level: unique seventeen-inch (17") "Rogue" chrome-plated alloy wheels, '60th Anniversary Edition' emblems on both upper front fenders, heated front bucket seats, a power sunroof, an A/M-F/M stereo with cassette and CD players, a matching spare wheel, and '60th Anniversary Edition'-embroidered front bucket seats.

Throughout its production run, the Grand Cherokee received many changes.

For 1999', the Grand Cherokee "WJ" was all-new, now in its second generation. The 4.0L PowerTech Inline Six-Cylinder (I6) engine was reworked, and received an increase in power, up to 195 horsepower and 225 lb. ft. of torque. The 5.2L Magnum V8 engine was replaced with an all-new 4.7L PowerTech V8 engine that now produced 235 horsepower and 305 lb. ft. of torque.

For 2000, since the Grand Cherokee was fully redesigned and all-new for MY1999, the 2000 model year Grand Cherokee received minimal changes. An accessory Mopar GPS navigation system, a new technology, was available starting in the third quarter of 1999. The base Laredo package was now the 26E Package, replacing the previously-available 26D Package. An overhead console with mini trip computer and EVIC, or VIC, was now standard equipment in all Grand Cherokees. Heated leather-trimmed front bucket seats, which were previously only available on the Limited trim level, were now available on the base Laredo trim level, when equipped with the 26F or 28F Packages.

In late 2000 For '2001 model year, the Grand Cherokee received a few changes. The Limited received new features, such as new seventeen-inch (17") tires and alloy wheels, the deletion of the gold emblem and side pinstripe option, a standard A/M-F/M stereo with both cassette and CD players, new "Royale" leather-trimmed heated seating surfaces, revised wood interior trim, a new, white-faced electroluminescent gauge cluster and a few other minor changes. The Limited also received the optional 60TH Anniversary Edition Package. The base Laredo trim level received minor changes such as the addition of the New England Special Group for the base 26E Package, aluminum interior trim to replace the existing wood interior trim, a new standard A/M-F/M stereo with cassette player and new integrated remote CD changer controls, and a few other minor changes. All models received a radio bezel that matched the other interior trim panels. All 4.7L PowerTech V8-equipped Grand Cherokees received the 545RFE 5-speed automatic transmission as standard equipment (it was previously optional equipment from 1999-2000). The Camel interior color was changed to Sandstone, which is a slightly different shade of tan. The Jeep emblem on the steering wheel changed from being molded-in-color to the steering wheel to chrome.

In 2002, the Grand Cherokee received a minor update. The base Laredo trim level lost the New England Special Group, but gained new sixteen-inch (16") alloy wheels, a new standard A/M-F/M stereo with single-disc, in-dash CD player and remote CD changer controls, new seat fabric for vehicles equipped with cloth seating surfaces, an additional front 12V power outlet to replace the previously-standard front cigarette lighter, and a standard six-way power driver's bucket seat. Sport and Special Edition trim levels were new in midyear 2002. The top-of-the-line Overland trim level debuted for 2002. the Limited model received a new front grille and new seventeen-inch (17") alloy wheel options. All sound systems were now higher quality than their predecessors, and new radio options were offered, which could support both satellite radio, as well as a new remote six-disc CD changer, and a Bluetooth hands-free telephone system (this was a fairly new technology, and the Grand Cherokee was one of the first vehicles to have this feature as an option). Side-impact front and rear airbags that deployed from the side windows were also a new option for 2002. A new High-Output version of the 4.7L Powertech V8 engine, producing 265 horsepower and 330 lb. ft. of torque, was available for the Limited trim level, and standard on the new Overland trim level. A previously-optional full-sized spare tire and wheel (non-matching on base trim levels, and matching on uplevel trim levels) combination was now standard on all Grand Cherokees. On the base Laredo trim level, the carpeted trim on the lower portion of the door panels was deleted in exchange for a textured plastic surface.

At some point in the 2002 model year, brakes were switched from the original ATE/Teves style caliper, to a new Akebono caliper. The original ATE/Teves caliper was prone to issues, the most common of which was significant steering vibration under high speed braking due to a complex set of brake pad brackets and guides to compensate for an imprecise caliper casting. In addition to loose pads that had a tendency to vibrate, this also occasionally led to higher brake temperatures, which could lead to premature failure. The Akebono calipers provided better seating for the brake pads, leading to more consistent pad placement over the life of the brakes. The hub and caliper placement did not change over the course of the WJ model, making the newer style brakes a direct bolt on replacement for older models.

In 2003, the Special Edition and Sport trim levels were discontinued (the Special Edition trim level would reappear for 2004). A new, A/M-F/M stereo with integral six-disc CD changer was available, and replaced the now-discontinued six-disc remote CD changer. A new, factory-installed A/M-F/M stereo with integral CD player and GPS navigation system became available midyear that replaced the previously-available dashboard-mounted unit. A new 28E Package was now available for the base Laredo trim level that offered the 4.7L PowerTech V8 engine at a budget-oriented price point. A Freedom trim level was available, based on the Laredo trim level. A coin console tray now replaced the ashtray in the center console, and high-back cloth front bucket seats were now standard equipment on the base Laredo trim level (low-back cloth bucket seats still remained available as an option, however). Production of the 2003 model year Grand Cherokees began in August of 2002, which was the shortest model year for the Grand Cherokee.

In 2003, during the Grand Cherokee WJ's final calendar year of production, the Special Edition trim level returned for MY2004, and a new Columbia Edition trim level was introduced in partnership with Columbia Sportswear that offered unique details, and an optional 4.7L High-Output PowerTech V8 engine on the Laredo trim level, taking on Chevrolet's The North Face Edition trucks and SUV's. The GPS navigation system radio was now available regardless of sound system package. The base Laredo trim level was reduced to one package, the 26E and 28E Packages, though the previously-available options on other Laredo packages were now available on this base package. All trim levels received new front fascias, and all 4X4 Grand Cherokees were now Trail Rated, as indicated by an emblem on the driver's-side front fender. The 2004 model year began in early 2003, and the Jefferson North Assembly Plant, or JNAP, temporarily closed in May 2004 to expand and remodel in preparation for the all-new, third-generation WK Grand Cherokee that debuted in April 2004 at the New York International Auto Show at Camp Jeep 2004.