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The US Army began to phase out the Sheridan in 1978, although at the time there was no real replacement. Nevertheless the 82nd Airborne were able to keep them on until 1996. The Sheridan was the only air-deployable tank in the inventory, and as an elite force they had considerably more "pull" than general infantry and armor units who were forced to get rid of them. Their units were later upgraded to the M551A1 model, including a thermal sighting system for the commander and gunner.

The Sheridan's only air drop in combat occurred during Operation Just Cause in Panama in 1989, when fourteen M551's were deployed; four were transported by C-5 Galaxies and ten were dropped by air, but two Sheridans were destroyed upon landing. The Sheridans' performance received mixed reviews. They were lauded by their operators and some commanders as providing firepower in needed situations to destroy hard targets. However, the Sheridans' employment of only HEAT rounds limited their effectiveness against reinforced concrete construction.

Fifty-one Sheridans were deployed in the Gulf War as some of the first tanks sent. They would not be very effective against the Russian-built T-72s. Their role was limited by age and light armor to reconnaissance duties, possibly 6 or less Shillelagh missiles were fired at Iraqi bunkers, these fewer than a half-dozen missiles, were the only time that the Shillelagh had been fired in a combat environment, from the inventory of the aforementioned 88,000 missiles produced.

Several attempts to upgun or replace the Sheridan have been made, but none were successful. Several experimental versions of the Sheridan mounting a new turret carrying a 105 mm gun were made, but the resulting recoil was too great. Several possible replacements for the M551 were tested as a part of the XM8 Armored Gun System and Expeditionary tank efforts of the early and late 1980s respectively, but none of these entered service. The Stryker Mobile Gun System has replaced the light tank role of the United States.

During the 1960s, the US and West Germany entered a joint project for a new tank common to both armies and intended to enter service in the 1970s. The MBT-70 project was technically advanced with sophisticated suspension, a low silhouette, spaced armor and advanced gun systems but suffered from excessive costs and the Germans pulled out of the project at the end of the decade.

After Vietnam, the M60 Patton was upgraded and designated the M60A2. It featured an entirely new low-profile turret with a commander's machine-gun cupola on top, giving the commander a good view and field of fire while under armor but spoiling the low profile. It also featured a 152 mm cannon, which fired conventional rounds as well as guided missiles.

The M60A2 proved a disappointment, though technical advancements would pave the way for future tanks. The Shillelagh/M60A2 system was phased out from active units by 1981, and the turrets scrapped. Most of the M60A2 tanks were rebuilt as M60A3.

In 1978, work began on the M60A3 variant. It featured a number of technological enhancements, including smoke dischargers, a new rangefinder, and M21 ballistic computer, and a turret stabilization system. In addition it reverted to the 105 mm cannon. All active American M60s eventually underwent the conversion to the A3 model. The M60A3 was phased out of US service in 1997.

The German Leopard tank, another 105mm armed tank, was introduced in 1965. It was sold widely to several nations in NATO as well as worldwide. It was followed in 1979 by the Leopard 2 with a 120mm smoothbore gun.

In 1976, prototypes of a new tank which became the M1 Abrams were delivered by Chrysler Defense and General Motors armed with a 105 mm rifled cannon. The Chrysler Defense design was selected for development as the M1. In 1979, General Dynamics Land Systems Division purchased Chrysler Defense. The M1 Abrams came from the diverted funds from the over budget and impractical MBT-70 and XM815 projects.

The M1 was the first of its kind. It feature a low profile turret and for the first time ever on a tank, composite Chobham armor. Despite all these advances, the Abrams still retained the 4-man crew of the M60 Patton as the autoloader was considered unproven and risky. It was armed with the same L7-derived 105mm gun as the M60. Over 3200 M1 Abrams were produced and first entered US Army service in 1980. About 6,000 upgraded M1A1 Abrams were produced and used the German 120 mm smoothbore cannon, improved armor, and a CBRN protection system.

As the Abrams entered service in the 1980s, they would operate alongside M60A3 Patton. These exercises usually took place in Western Europe, especially West Germany, but also in some other countries like South Korea. During such training, Abrams crews honed their skills for use against the Soviet Union. However, by 1991 the USSR had collapsed and the Abrams would have its trial by fire in the Middle East.

The British FV4030/4 Challenger, continuing with a 120mm rifled gun for long range accuracy and the use of widest type of rounds, and protected by Chobham armor entered service in 1983.