The JGSDF started studies on a new tank design with Mitsubishi in 1962, as it was realized that the Type 61 would not be able to defeat the latest Soviet designs like the T-62. Features from several designs were incorporated, including the controllable suspension of the US-German MBT-70 project, the hull of the Leopard 1, and the L7 105mm gun. The design included a rotating cupola for the commander, and a new autoloader for the main gun. Prior to the 1965 decision to design an entirely new tank, some technologies which would later be used in the STB-1 were already in development independently in Japan.The design was finalized in 1964 and various test rigs were built between 1964 and 1967.
During the development stage, engineers opted for a license on the NATO standard Royal Ordnance 105mm cannon. The part that Japan imported for license production was only the barrel. Breech, recoil system and mantlet around the cannon were later built in Japan. The full length of the cannon, including all parts just mentioned, was 5,592mm long and the total weight was 2,800kg. Initially the main gun only used APDS (Armor-Piercing Discarding Sabot) and HEP (High Explosive Plastic) as its primary ammunition. Later it was modified to fire APFSDS (Armor-Piercing Fin-Stabilized Discarding Sabot) and HEAT-MP (High-Explosive Anti-Tank Multi-Purpose) shells as well.
Secondary armament consisted of a 12.7mm anti-aircraft machine gun (660 bullets carried) and a 7.62 co-axial machine gun(4500 bullets carried).
The Type 74 tank has the Mitsubishi 10ZF Model 21 10-cylinder two-stroke cycle diesel engine providing 750 hp (560 kW). At 19 hp/tonne, its power-to-weight ratio is similar to the French AMX-30. The maximum quoted road speed of the Type 74 is 53 km/h but its top speed is at least 60 km/h.
Type 74 adopts welded bulletproof steel plates instead of composite armor which is later used on Type 90 main battle tank. However, sloped armor is extensively used to defeat armor-piercing shells and other kinetic energy penetrators. Type 74 has a frontal hull armor of 80 mm. Due to its heavily sloped nature, its effective armor thickness goes up to 189 mm for upper glacis and 139 mm for lower glacis. The side armor of Type 74 is 35 mm thick while the armor at the back is 25 mm thick. The frontal armor of the cast steel turret has been estimated to be 195 mm. When compare Type 74 with other second generation main tanks, its armor is worse than T-62(174mm and 204mm) but better than leopard 1. (122mm and 140mm)