The Shelby Lancer was a limited-production sports sedan based on the Dodge Lancer. Offered by Shelby for 1987 only, the Shelby Lancer was intended to be an American counterpart to such European sedans as the BMW 3-Series and Peugeot 405. It was well-equipped inside with many amenities not offered on the normal Lancer, including a special 10-speaker Pioneer audio system.

Power came from Shelby's Turbo II 2.2 L I4, with 175 hp (130 kW) and 175 ft.lbf (237 Nm). Weight was over 3,000 lb (1,360 kg), so performance was not as good as the Shelby GLHS with a 7.2 s run to 60 mph.

Special wheels and blacked-out trim called attention to the Shelby graphics on the lower body. 800 Shelby Lancers were made, split roughly evenly between 5-speed manual and automatic/leather cars. Dodge carried on the car with the 1988 and 1989 Lancer Shelby, which is not to be confused with the true Shelby car.