The third generation was patterned after the Mako Shark II concept car. The C3 was introduced for the 1968 model year and lasted through 1982, and at 15 years was the longest running Corvette generation. It came out on top of the performance era of the 1960s, sold in record numbers through the EPA rules and gas crunch of the 1970s, and stood its ground against its competition into the early 1980s. It introduced monikers now revived such as LT-1, ZR-1, and Collector Edition. It would be the first Corvette Indy 500 pace car, and celebrated the Corvette's 25th anniversary with a limited edition Indy Pace Car replica and a two-tone Silver Anniversary Edition.

In 1970 small-block power peaked with the optional high compression, high-revving LT-1 which produced 370 bhp (276 kW). The ZR1 special engine package was an option available 1970–1972 exclusively with the LT-1 engine option which included special racing equipment. Only 53 1970–1972 ZR1s were built.[3] The 427 cu in (7.00 L) big-block was enlarged to 454 cu in (7.44 L) in 1970, and 1971 was the LS6 454 big-block's peak in power with the 425 bhp (317 kW) rating.

In 1971, engine compression ratios were lowered for the use of low-lead and unleaded fuels, and reduced horsepower ratings resulted. GM moved to the SAE Net measurement in 1972 with further reduced, but more realistic horsepower ratings than the previous SAE Gross standard. The 1972 model's base 350 cu in (5.7 L) was down to 200 bhp (150 kW).

1974 models had the last true dual exhaust system which was dropped with the introduction of the federally mandated catalytic converter required on 1975 models. As a result, engine power plummeted with the base ZQ3 engine producing just 165 bhp (123 kW), the optional L82's output was reduced to 205 bhp (153 kW), and the 454 big-block engine was discontinued. Gradual horsepower increases after 1975 peaked with the 1980 model's optional L82 producing 230 bhp (172 kW).

Styling changed subtly over the generation and minor trim changes occurred through 1972. The Sting Ray nameplate was not used on the 1968 model but Chevrolet still referred to the Corvette as a Sting Ray, and 1969 through 1976 models used the "Stingray" name as one word, without the space. The optional wire-spoked wheel covers (left) were offered for the last time in 1973. Due to the government regulation, the 1973 Corvette's chrome front bumper was changed to a 5-mile-per-hour (8 km/h) system with a urethane bumper cover.

In 1974 a 5-mile-per-hour (8 km/h) rear bumper system with a two-piece, tapering urethane bumper cover replaced the Kamm-tail and chrome bumper blades, and matched the new front design from the previous year. 1975 was the last year for the convertible (which did not return for 11 years) and Dave McLellan succeeded Zora Arkus-Duntov as the Corvette's Chief Engineer.[4] For 1976 models the the fiberglass floor was replaced with steel panels to provide protection from the catalytic converter's high operating temperature. 1977 was last year the tunneled roof treatment with vertical back window was used. The black exterior color returned after a six-year absence, and the Stingray nameplate was dropped ending 13 model years where the names Corvette, Sting Ray, and Stingray were synonymous.[5] The 1978 model introduced the "fast back" glass rear window and featured a new interior and dashboard. Corvette's 25th anniversary was celebrated with the Indy 500 Pace Car limited edition and a Silver Anniversary model featuring silver over gray lower body paint. All 1979 models featured the previous year's pace car interior and offered the front and rear spoilers as optional equipment. In 1980, the Corvette received an integrated aerodynamic redesign that resulted in a significant reduction in drag. In mid-1981 production shifted from St. Louis, Missouri to Bowling Green, Kentucky, and several two-tone paint options were offered. In 1982 a fuel-injected engine returned, and a final C3 tribute Collectors Edition featured an exclusive, opening rear window hatch.