The third generation Cadillac Escalade commenced production in 2006 built on General Motors' GMT900 platform (GMT926 body code). Featuring a sleeker exterior silhouette with a steeper windshield angle and refined aerodynamics, the model set new benchmarks for cabin craftsmanship with soft-touch hand-wrapped leather instrument panels, authentic wood inlays, and aluminum trim accents. Available in standard length and extended-wheelbase ESV forms, it retained a heavy-duty body-on-frame layout while adopting Magnetic Ride Control real-time adaptive suspension dampening alongside power-retractable assist steps and a power liftgate.

Power was provided by an all-aluminum 6.2-liter Vortec 6200 V8 engine equipped with Variable Valve Timing, outputting 403 horsepower and 417 lb-ft of torque, mated to a 6L80 six-speed automatic transmission. In 2008, Cadillac introduced the Escalade Hybrid combining a 6.0-liter V8 with a Two-Mode electric hybrid transmission, cutting city fuel consumption by 33 percent. Ongoing refreshes throughout its lifecycle brought side blind zone alert systems, heated and cooled front seats, updated touch-screen navigation, and enhanced acoustic laminated glass. Standard and optional equipment included advanced active and passive safety systems, multi-zone climate control, and upgraded interior electronics.