As a part of the Mercedes-Benz's midsize lineup, the 260e belongs to the E-class series. The E-Class consists of four models 300CE coupe, 300E 4-door sedans, a 300TE 4-door station wagon, and the 260E. The E-Class is Mercedes-Benz's entry that compete the other line of vehicles such as Acura TL, Audi A6, BMW 5-Series, Jaguar S-Type, and Lexus GS.

In 1987, Mercedes-Benz 260 E came as a 4 door sedan. It was equipped with power 4 wheel disc with ABS, two wheel rear drive, driver side airbag, defroster at rear, front fog lights, and lot of accessories and amenities that are truly a Mercedes Benz trademark. It was powered by a 2.6L 6 cylinder engine rated at 158 hp coupled with 5 speed manual transmission.

A year later in 1988, Mercedes-Benz 260 E four door sedan was made better. It got the power 4 wheel discs with ABS, air conditioning, cruise/speed control, power door, power windows, driver side airbag, automatic seatbelt at the driver side, power steering, custom wheels, radio, am/fm with cassette, front fog lights, and many more. At 2 wheel rear drive, 1988, Mercedes-Benz 260 E was powered by a 2.6l 6 cylinder rated at 158 hp in a five speed manual transmission.

In the following year, the Mercedes-Benz 260 E four door remained almost the same. It still got the same power 4 wheel disc with abs, air conditioning, cruise/speed control, power door, power windows, driver side airbag, automatic seatbelt at the driver side, power steering, custom wheels, radio, am/fm with cassette, and front fog lights. Mercedes-Benz 260 E was still powered by a 2.6l 6 cylinder rated at 158 hp in a five speed manual transmission. The only significant additions for this year were damper struts with coil springs suspension, full spare tire, and the new 4 speed automatic transmission.