As part of a general redesign of the E-Class in 2003, Mercedes-Benz introduced the E500 sedan. It replaced the previous year's E430, which was powered by a 275-horsepower, 4.3-liter V8. The new E500 upped that a notch by dropping a 5.0-liter V8 under the hood.

Borrowed from the S-Class, the new V8 produced 302 horsepower, and was linked to a five-speed automatic transmission with the Touch Shift feature, which enabled the driver to upshift and downshift by nudging the shift lever left or right. This gave the driver the option to adjust the car's performance based on driving conditions.

The E500 benefited from a redesign of the E-Class for 2003. It featured a stronger body structure than previous E-Class models, making for a safer vehicle, although it weighed no more than the previous year's models. Styling updates for the E-Class in general included new headlights, an arched roof, gently flared wheel wells, and sleeker body lines, all of which were incorporated into the E500's design.

The E500 was equipped with the automaker's TeleAid emergency communication and assistance program, as well as the Electronic Stability Programming (ESP) anti-skid system.

Other standard features included leather seats with power adjustment in the front, a multi-zone automatic climate control system, dual front and side airbags, power windows, power exterior mirrors, cruise control, and an AM/FM audio system with a cassette player, although a CD player was available as an option.

Other options included Dynamic Drive seats that adjusted automatically to support the driver under heavy cornering, a twin sunroof with power sunshades, and a smart cruise control system that automatically adjusted the vehicle's speed to maintain a set distance from the car it followed.

Drivers were complimentary about the E500's styling, calling it a refined and elegant car that handled well in both city and highway driving conditions. Drivers noted that the interior was particularly comfortable, although some decried the lack of an optional navigation system. Some drivers thought the car was over-engineered, insulating the driver from the feel of the road, but generally reported that it was a reliable vehicle.