After 13 years of production, (December 1996 production) February 1997 saw the Cherokee receive updated exterior and interior styling. Both the two- and four-door bodies remained in production, receiving a steel liftgate (replacing the fiberglass one used previously), restyled taillights, additional plastic molding along the doors, as well as a new front header panel that featured more aerodynamic styling. The spare tire remained mounted to the interior rear quarter panel on the driver's side in the trunk. A new, unique spare tire carrier was invented by Peter Gruich while working for Jeep Special Programs that utilized the trailer hitch bar and a unique pivot bracket and although it was the only external spare tire carrier to pass the full Jeep durability test, it was not offered for sale. The interior was similarly updated with an all-new design and instrument panel featuring the first blow-molded symmetrical instrument panel retainer structure. This instrument panel featured a unique cluster/airbag bracket invented by Peter Gruich that allowed the interchange of the two components in order for the vehicle to be sold in the right hand and left-hand drive markets with both driver and passenger airbags. A stiffer unibody frame brought improvements to noise, vibration, and harshness (NVH) measurements. Also contributing to NVH improvements were new door seals that reduced wind noise at higher speeds.

In the middle of the 1999 model year, vehicles with the 4.0 L engine received a revised intake manifold. This was done to help counteract smaller exhaust porting on the latest casting of cylinder heads, which was done to meet more stringent emissions control laws. Both the four- and six-cylinder engines were offered through the 2000 model year, though only the straight-six was available in 2001. For the 2000 and 2001 model years, all six-cylinder XJs received a distributorless ignition system using coil-on-plug ignition replacing the "traditional" system previously used; coupled with better exhaust porting and the newer intake manifolds, this gave a minor increase in power over the previous models. Transmission, axle, and transfer case choices were carried over from the previous models. However, major changes were underway with a new executive, Wolfgang Bernhard, who was known as a "cost-slasher" nicknamed "whirlwind", who came from Mercedes-Benz to turn around Chrysler. "One of the first moves Bernhard made when he came to Chrysler in 2000 was to help kill the Jeep Cherokee, an aging, somewhat bland SUV." Thus, the (XJ) Cherokee line was replaced in 2001 by the Jeep Liberty (KJ), although it retained the "Cherokee" nameplate in most foreign markets.

The Cherokee (XJ) remains a popular vehicle among off-roading enthusiasts. Its design has been noted as one of the greatest of all time. Popular Mechanics listed the XJ as one of "the 25 greatest boxy cars of all time".When (XJ) Cherokee production ended in May 2001, the portion of the Toledo South Assembly Plant devoted to its production was torn down.

Designs of the compact-size XJ Cherokee date back to 1978 when a team of American Motors (AMC) and Renault engineers drew several sketches. Clay models were based on the then-current full-size SJ Cherokee. Early sketches of the XJ Cherokee had a European influence, and most of the styling cues were done by AMC engineers under the direction of Dick Teague, vice president of design.

Noticing that General Motors was developing a new two-door S-10-based Blazer, AMC decided to develop an entirely new four-door model in addition to a two-door version. American Motors' vice president of engineering, Roy Lunn, designed what is known as the "Quadra-Link" suspension, that limited rollovers.Renault's François Castaing developed the drivetrain using a much smaller engine than normally found in 4WD vehicles and reduced the weight of the new model. It "is noteworthy as the first nonmilitary 4x4 with unibody construction."The unconventional design enhanced XJ's durability and off-road capability that eventually won over most critics, even those models with the early underpowered GM engines.The XJ is described "as the first small crossover SUV in the U.S.," with "plenty of the Jeep toughness (and a straight-six engine) built-in." The design and market positioning of the XJ, along with the AMC Eagle essentially "foreshadowed the car-based crossover utility-vehicle fad."

"The new XJ Jeep ... was 1,200 pounds lighter, 31 inches shorter, six inches narrower and four inches lower than the Cherokee SJ it replaced, and yet — thanks to unibody construction — the XJ kept 90 percent of its predecessor’s interior volume." And, not only was fuel economy much improved, but "articulation is also better, as is ground clearance, as well as approach, departure and breakover angles. These, along with its smaller profile, make the XJ better both off-road and on." Teague, who was responsible for the Jeep Cherokee (XJ) that was launched in the United States in 1983. He described the practical and utilitarian appearance of the new SUV: "We didn't want to lose the flavor of the older Jeeps ... We wanted it to look like something you'd want to take into the rough country

Although the XJ models had just been introduced, AMC quickly began development of its successor. To compete against its much larger rivals, the smallest U.S. automaker created a business process that is now known as "product lifecycle management" (PLM) to speed up its product development process. By 1985, development and engineering was based on computer-aided design (CAD) software systems while new systems stored all drawings and documents in a central database. The pioneering PLM was so effective that after Chrysler purchased AMC in 1987, it expanded the system throughout its own enterprise.

British TV presenter and motoring expert Quentin Willson described the XJ Jeep as "a real 4x4 icon" and one of the "few truly great cars... which, despite being left behind by newer models, still offer fresh and urgent possibilities. Cars which become more relevant the older they get."

Jeep is a brand of American automobiles that is a division of Stellantis North America. The history of the Jeep brand dates back to World War II, when the U.S. government commissioned the development of a small, lightweight, and versatile vehicle that could be used by the military in a variety of roles.

The prototype for the Jeep was developed in 1940 by American Bantam Car Company. This prototype, known as the "Blitz Buggy," was designed to meet the U.S. Army's requirements for a lightweight reconnaissance vehicle. However, American Bantam was unable to meet the Army's production needs, so the project was handed over to Willys-Overland and Ford Motor Company.

In 1941, Willys-Overland began production of the first Jeeps, which were officially known as the Willys MB. The Jeep quickly proved to be a versatile and reliable vehicle, and it was used in a variety of roles by the military, including reconnaissance, transportation, and as a weapons platform.

After World War II, Willys-Overland began producing Jeeps for civilian use. The first post-war Jeep model was the CJ-2A, which was similar in design to the Willys MB, but with a few modifications for civilian use.

Over the next few decades, the Jeep brand continued to evolve and expand. In 1953, Willys-Overland was purchased by Kaiser Motors, and the company was renamed Kaiser-Jeep. Under Kaiser-Jeep, the company introduced new models such as the Jeep Wagoneer and the Jeep Cherokee.

In 1970, American Motors Corporation (AMC) purchased Kaiser-Jeep, and the company was renamed AMC Jeep. Under AMC, the Jeep brand continued to grow, with the introduction of new models such as the Jeep CJ-7 and the Jeep Grand Wagoneer.

In the 1980s, the Jeep brand was acquired by Chrysler Corporation. Under Chrysler, the Jeep brand continued to evolve and expand, with the introduction of new models such as the Jeep Wrangler and the Jeep Grand Cherokee.

In the late 1990s and early 2000s, Daimler-Benz AG and later DaimlerChrysler AG owned the brand, but in 2007, Chrysler LLC separated from Daimler AG and the brand became part of the newly formed company.

Today, the Jeep brand continues to be an important part of the automotive industry, with a range of popular models such as the Jeep Wrangler, the Jeep Grand Cherokee, and the Jeep Gladiator. The brand is known for its rugged, off-road capable vehicles and its reputation for durability and reliability.

Overall, the Jeep brand has a rich history that is closely tied to the history of the United States. From its origins as a military vehicle in World War II, to its evolution into a popular civilian vehicle, the Jeep has played an important role in the automotive industry and continues to be a symbol of American ingenuity and versatility.