1983 was a very unique year for USA Stratocaster production. Fender was losing sales to the Japanese imports and Strat copies, and in a "last-ditch" effort to keep afloat, and maintain a USA-made Stratocaster, several major changes were made to the basic strat platform that had been widely unaltered since its inception in 1954. The basic 6 screw bridge and tremolo system was changed to a newly designed "Freeflyte" tremolo/bridge. This was a major departure from Leo Fender's original design, and utilized top-loading strings, with the tremolo springs hidden under the pickguard, rather than on the back side of the guitar. This eliminated the need to route the rear of the body at all. As a result, the backside of a 1983 Strat is completely smooth, with no tremolo cover or string ferrules. The tremolo arm was also a "push-in" type, with a chrome tip. This was the first time a Strat was ever offered with this type of arm, as they had been threaded (and with a plastic tip) every prior year since the guitar's debut 30 years earlier.

Another major change involved the removal of the second tone knob, instead placing the input jack on the pickguard, and in turn eliminating the traditional chrome recessed oval "football" jack. The single tone knob controlled all 3 pickups, in all 5 switching positions, something no strat ever featured before. The headstock was also revised, going from the CBS era large shape back to a smaller, more traditionally styled one. The shape was not 100% accurate to the original 50's design, but was a definite nod to that era. The headstock logo was revised this year, eliminating the large block lettering of the "Stratocaster" name with a new, more modernized font. Frets were jumbo, the neck radius was a rather flat 12", and profile was slightly chunky. A very good feeling neck, and considered by some to be the nicest Strat necks of the 1980's. In spite of all of these changes, the guitar was essentially a financial flop, and Fender production was moved almost entirely to Japan from late 1984 until the introduction of the American Standard in late 1986, making these "2 knob" Strats a short-lived model.