Production of the more aggressive looking Integrale 16-Valve began in May 1989.

The Integrale's previously flat bonnet now had a 1.2 inch power bulge beneath which the new 16-valve cylinder head sat. Both the bonnet and the additional valves dynamically transformed the car. The engine's output increased to an awesome 200bhp, and the wheels and tyres were also bigger. A new torque split favored the rear wheels, with 47% front and 53% rear, although ABS was still only an option. 

The 16v claimed the World Championships in 1989, 1990 and 1991.  

    The car was a flyer and demanded commitment, sprinting to 100kph in just 6.1 seconds. A middle silencer box under the car helped keep the environmentalists quiet, but at full cry the new engine's animalistic growl was an aural sensation. The single plate clutch coped with the power admirably, and the tail could be induced into deliciously controllable power slides with a heavy right boot.
    It has the same well-tried system of permanent all-round drive with three differentials, but with the following changes: The new 1995 cc turbo compressed engine - with twin overhead camshafts, inter cooler and balancing shafts - now adopts four valves per cylinder. The 16 valves and new injectors allow Lancia to extract more power (200 bhp against the previous peak of 185). In addition, a new turbo compressor and a new mapped injection/ignition by IAW improves torque values and accelerator response. 
    The brakes are beefed up to match the higher performance and anti-lock brakes appear as an option. The gearbox and suspension are modified; a hydraulic clutch is fitted, along with wider 7" alloy wheels and fatter tyres - 205/50 ZR 15. The lowered line, bigger tyres and the substantial bonnet bulge with new ventilation grills, give the car a much more aggressive look. Performance figures are exceptional: 220 kmph top speed, 26.1 seconds for the standing kilometre and 5.7 seconds from 0-100 km/h.
    The Lancia engineers have developed some very interesting new tweaks - a significant modification being to the electronically controlled waste gate valve. This valve normally cuts out the turbo-charging at a pre-determined point - established during the design phase of the car. In the integrale 16V the waste gate is given an intelligent function, thanks to a proportional solenoid valve which continually varies the charging pressure. Thus when maximum power is required from the engine, the management system (part of the injection/ignition system) reads a series of parameters (from engine rpm to the temperature of the air outside) and automatically adjusts the waste gate . The electronic control means that the increased power is delivered more progressively, exploiting the engine's turbo-charged potential to the full.
    Another of the principal innovations in the new version is the optional ABS. The system, engineered by Lancia, started out with the Bosh four-channel six-sensor layout - but seeks to address the inherent problems facing all four-wheel drive vehicles using viscous coupling transmission. These problems arise because all four wheels are automatically maintained in a semi-rigid state. To ensure maximum anti -locking effectiveness, this new sophisticated ABS system utilises a new functioning logic. It has two sensors - to measure longitudinal acceleration and transverse acceleration - mounted at the car's center of gravity near the gear lever. The ABS management system pulses successive braking cycles - not just to the wheels on the side with less grip (which are slipping) - but also to the wheels on the other side, which provides a more even braking torque throughout. This prevents violent yawing on surfaces with non-uniform grip, although the braking distance can be a little longer as a result.
    When the risk of yawing is minimal (on a surface with uniform grip) or when the yaw can be effectively controlled (fast cornering), the ABS management system is programmed to re-introduce maximum brake efficiency. In practice, the control box abandons its braking program when the longitudinal acceleration sensor detects a minimum of yawing, or when the transversal acceleration sensor detects that the car is cornering fast - a condition in which the driver has a firm grip on the steering wheel and is ready to correct the trajectory. Finally, to prevent the situation whereby excessive engine braking on the rear wheels reduces stability (as the accelerator is released and the brake pedal is depressed) the ABS signals the injection/ignition management system to speed up the idle.
    Modifications to the original bodywork - many of which had already made their appearance on the previous version - are strictly in line with mechanical evolution and improved performance. The widened wheel arches, side skirts, four circular headlamps and twin exhausts (the classic distinguishing marks of the Lancia Delta Integrale) are joined by a central bonnet bulge about 3 cm high, with two grilled air intakes and an air feed under the spoiler. The modifications are required to increase the size of the engine bay to house the new 16V engine and to cool the gearbox oil. The wider tyres and the lower trim from the modified suspensions also make the car look more aggressive. Identity badges on the front grill and the tailgate are given the '16V' designation.
    Although the headlamps look the same as the ones on the previous model, they are more powerful, especially the dipped pair. Inside, cabin trim is unchanged, with fabric and Alcantara, the three-spoked, leather-trimmed racing wheel, instruments which include a manometer and a restyled oil temperature gauge. The front seats are competition Recaros and the back of the rear seat has an asymmetrical split. The available colour range comprises five choices: White, Monza Red, Metallic Dark Grey, Bordeaux and Metallic Black.