Mitsubishi Heavy Industries and the Japanese Ground Self-Defence Force began project definition studies for a new MBT to succeed the Type 61 in 1962. To prove the basic concept, a number of test rigs were built and tested between 1964 and 1967. Construction of the first two prototypes began at the Maruko works of Mitsubishi Heavy Industries late in 1968 and was completed in September 1969. They were called the STB-1 and contained many features of other tanks under development at that time.

The STB-1 was followed in 1971 by the STB-3 which had the automatic loader removed as it proved both too complex and too expensive. The remote-controlled 12.7 mm (0.50) machine gun was also replaced by a simpler mount and the turret was slightly different in shape having a much longer bustle.

The first production contract was placed before the final model, the STB-6 and appeared in 1973. The first Type 74 MBT was completed in September 1975 and by the time production was complete a total of 873 Type 74 MBTs had been built by Mitsubishi Heavy Industries. It has been followed in production by the Type 90 MBT armed with a 120 mm smoothbore tank gun.

The hull of the Type 74 MBT is of an all-welded steel and is divided into three compartments: driver's at the front, fighting in the centre and engine at the rear.

The driver is seated at the front of the vehicle on the left side and is provided with a single-piece hatch cover that opens to the left. There are three JM 17 Mod 2 periscopes mounted forward of this hatch cover and an infra-red or passive night periscope can be mounted in the centre of the hatch cover and used in conjunction with the infrared driving lights.

The turret is all-cast steel with the commander and gunner seated on the right and the loader on the left. The commander's cupola can be traversed through 360° and has a single-piece hatch cover that opens to the rear. There is a J3 infrared periscope sight with an integral laser range-finder and a magnification of x1 and x8 in the forward part of the commander's cupola. He also has five periscopes, two on either side and one to the rear. The gunner is seated forward of the commander and is provided with a J2 IR periscopic sight, with a magnification of x1 and x8, in the turret roof and a telescope linked to the main armament. The loader has a single-piece hatch cover that opens to the rear and a periscope which can be traversed through a full 360° mounted forward of his hatch. There is an external stowage basket at the rear of the turret.

The engine and transmission are mounted at the rear of the tank with the exhaust pipes and silencers mounted on the running boards to the rear of the hull. The maximum quoted road speed of the Type 74 is 53 km/h but reliable sources have indicated that its top speed is at least 60 km/h.

The suspension is hydropneumatic and can be adjusted to suit the type of terrain being crossed. There are five dual rubber-tyred roadwheels with the drive sprocket at the rear and the idler at the front. There are no track-return rollers. The hydropneumatic suspension can be operated either by the commander or the driver and enables the tank to be inclined 6° forwards or backwards, 9° left or right and raised or lowered giving a minimum ground clearance of 200 mm and a maximum ground clearance of 650 mm.

Standard equipment includes infrared driving lights, an infrared searchlight to the left of the main armament and an NBC system. In the white light mode the searchlight has a maximum range of 3,000 m and in the infrared mode a range of 1,000 m. One Type 74 MBT in each company is fitted with a dozer blade.

Main armament consists of a 105 mm rifled tank gun which fires the standard range of ammunition including APDS-T and HESH-T. Early in 1984, it was announced that the Japanese Ground Self-Defence Force was to introduce the American 105 mm M735 APFSDS-T round for the Type 74 MBT, with prime contractor in Japan to be Daikin Industry. There are 14 rounds of ready use ammunition carried in the turret. The gun has a drop block-breech mechanism and a new concentric recoil mechanism to reduce the volume of the upper part of the gun as well as reducing the frontal area of the turret. The fire-control system includes a Nippon Electric laser range-finder mounted in the commander's sight, which also provides inputs to the Mitsubishi Electric ballistic computer connected to the gunner's sight. Target range is fed to the computer automatically but trunnion tilt, barrel wear, ammunition type and temperature are fed in manually. The main armament is stabilised in both the vertical and horizontal planes.

A 7.62 mm Type 74 machine gun is mounted coaxially with the main armament and a 12.7 mm (0.50) Browning M2 HB machine gun is pintle-mounted in the centre of the turret forward of the commander's and loader's positions. This has an elevation of +60° and a depression of -10°. Three smoke grenade dischargers are mounted either side of the turret. A stowage basket extends around the rear of the turret.

Late in 1988 it was observed that a number of Type 74 MBTs had been fitted with a thermal sleeve for their 105 mm guns, thermal night vision equipment and armour on the top and forward parts of their turrets.

More recently a number of other modifications have been carried out to the Type 74 MBT. These include the installation of a laser warning system on the roof (similarto that fitted to the Type 90 MBT), modifications to the fire-control system, modified rear drive sprocket and the fitting of track skirts.