In 1978, work began on the M60A3 variant. It featured a number of technological enhancements, including smoke dischargers, a new flash-lamp pumped ruby-laser based rangefinder (AN/VVG-2) that could be used by both commander and gunner, and an M21 ballistic computer, and a turret stabilization system.

Late production M60A3s omitted the commander's cupola (Israeli Defence Force armor doctrine required tank commanders to fight commander-exposed, and it was discovered that non-penetrating hits upon the vehicle could dislodge the cupola from its mount while the commander was in it). The remote-controlled M85 machinegun was relatively ineffective in the anti-aircraft role for which it was designed compared to a conventional pintle mount. Removing the cupola lowered the vehicle's relatively high silhouette. The cupola's hatch also opened toward the rear of the vehicle and was dangerous to close if under small-arms fire owing to an open-locking mechanism that required the user to apply leverage to unlock it prior to closing.

The M60A3 was phased out of US service in 1997, but it has remained a front-line MBT into the 21st century for a number of other countries.

While overall a considerably less effective tank than the M1 Abrams, the M60A3 did have some limited advantages over some M1 models:

The M60A3 had a notably better thermal imaging system than that of the M1 up into the 21st century, when many M1s had newer ones installed. It was, however, considerably noisier, emitting a loud clicking sound audible several meters outside the vehicle.
The M60A3 had an exterior phone for infantry to talk directly to the crew inside. This feature was also installed on some USMC M1A1s in Iraq and is now being incorporated into all active Abrams.
The diesel had lower performance, but also had lower cost, maintenance and better fuel efficiency.
The exhaust temperature of an M1's turbine is very high, which makes it dangerous for infantry to take cover behind it. This is not the case with the diesel engine on an M60A3.
The escape hatch located under the hull of the M60A3 is not present in the M1 Abrams (due to the Abrams having lower clearance between the ground and the bottom of the hull), making it more difficult for the crew to bail out of a battle-damaged Abrams or evacuate casualties than from an M60A3.
The M60 series' L68A1 105 mm main gun fires a much wider variety of ammunition than the currently used 120 mm smoothbore on the M1 series, including a dedicated HE (High Explosive) round, and a white phosphorus smoke round, among others.
The M60 series includes instrumentation enabling indirect fire as ad-hoc artillery if needed.

Vier uitvoeringen mogelijk;

OPFOR Academy, CMTC Hohenfels, September 1992.
3/68 AR, IIIrd (US) Corps, REFORGER '87, Exercise "Certain Strike", Deutschland 1987.
2/68 AR, 8th Infantry Division, REFORGER 88, FTX "Certain Challenge", Waldmannshoffen, Deutschland 1988.
2/69 AR, 197th Brigade (Independent), Vth (US) Corps, REFORGER 88, FTX "Centrain Challenge", Aub, Deutschland.

Lang; 268 mm
Aantal onderdelen; 257