GM has redesigned the 9-passenger Yukon XL & Yukon XL Denali to make them more competitive in the full-size SUV market. The exterior styling has been tightened up for a more contemporary look, while the interior has been updated with improved materials and build quality. Stabilitrak(R) stability control is standard. The standard 320-bhp 5.3L, and optional 355-bhp 6.0L V-8 engines have Active Fuel Management(TM) (formerly known as Displacement on Demand.) Active Fuel Management(TM) allows the engine to run on 4-cylinders under light load conditions, for improved fuel economy. All models except Denail include 4-speed automatics. The Yukon XL Denali gets the 380-bhp 6.2L V-8, a 6-speed automatic, slightly different styling, and interior trim upgrades. Maximum towing capacity is up to 8,100 lbs.

GM's full-sized SUVs wear all-new styling inside and out for 2007. Engine choices include 5.3L, 6.0L, and 6.2L V8 engines, most with cylinder deactivation technology to increase fuel economy. Flexible fuel versions allow for running on ethanol. A four-speed automatic is retained in all models except the range-topping Denali.