From the late 1970s onwards, Mugen offered cylinder kits and complete conversions for the Honda CR 125, CR250, and CR480. These machines were in high demand in the US Motocross Championship and the World Championships (GP).

A milestone was reached in 1980 when Johnny O'Mara won the US Grand Prix in Mid-Ohio on a Mugen ME125. This was the first time that a "private motorcycle" (even though it was technically a factory motorcycle) beat an official Honda factory bike.

Mugen played a key role in bringing water cooling for motocross machines to market maturity. While Honda was still selling air-cooled production machines, Mugen was already offering water-cooled cylinder kits for the CR125 long before they became the industry standard. Mugen went beyond mere tuning. They developed their own engine cases and reed valves, which were often superior in performance to the official factory parts from Honda (HRC). Mugen also experimented early on with variable exhaust control systems to broaden the narrow rev range of the 125cc and 250cc two-stroke engines.