The Dash 8-40C, or C40-8, was introduced in 1988 after the Dash 8-39C. As its designation suggests, it has an output of 4,000 hp and two three-axle trucks. Together with its four-axle sister, it was the first GE locomotive with microprocessor-equipped engine control units. Some locomotives which have either been built or rebuilt with a modified prime mover with 4,135 hp are being designated Dash 8-41C.

The basic variant had the narrow nose known from earlier locomotives. Between 1987 and 1992, 607 were built and Union Pacific was the largest customer with 255. Four were even delivered to the Estrada de Ferro Carajás in Brazil with a gauge of 5 ft 3 in or 1,600 mm.

More successful was the Dash 8-40CW with a wide cab that since has became standard. When production was completed in 1994, 1,531 had been delivered. The largest customers were CSX with 375, Conrail with 236, Union Pacific with 204 and ATSF with 152.

The Dash 8-40CM was a variant that does not only have a wide cab, but also a full-width cowl body and other trucks. 84 have been built with 55 going to Canadian National, 26 to BC Rail and three to the Quebec North Shore and Labrador Railway.