Remove the alternator and have it checked. Most auto parts stores will do it for free. The problem
sounds like a bad diode inside the alternator.
If the alternator checks good, look for voltage on the small Lt green/red wire that plugs into the alterantor.
With the key off, there should not be voltage present on Lt green/red wire. With the key on, you should see voltage.
That is the wire that tells the regulator to turn on and supply power to the field windings. If there is voltage with the key off,
someone has miswired the ignition switch. See the diagram below.
Diagram courtesy of Tmoss & Stang&2birds
Before putting a new alternator on the car, check the secondary power ground between the
back of the intake manifold and the driver's side firewall. It is often missing or loose. It supplies
ground for the alternator, A/C compressor clutch and other electrical accessories such as the gauges. [
B]Any car that has a 3G or high output current alternator needs a 4 gauge ground wire running f
rom the block to the chassis ground where the battery pigtail ground connects. [/B] The 3G has a
130 amp capacity, so you wire the power side with 4 gauge wire. It stands to reason that the
ground side handles just a much current, so it needs to be 4 gauge too.
See the following website for some help from Tmoss (diagram designer) & Stang&2Birds
(website host) for help on 88-95 wiring
http://www.veryuseful.com/mustang/tech/engine/ Everyone should bookmark this site.
Ignition switch wiring
http://www.veryuseful.com/mustang/tech/engine/images/IgnitionSwitchWiring.gif
Fuel, alternator, A/C and ignition wiring
http://www.veryuseful.com/mustang/tech/engine/images/fuel-alt-links-ign-ac.gif
Complete computer, actuator & sensor wiring diagram for 88-91 Mass Air Mustangs
http://www.veryuseful.com/mustang/tech/engine/images/88-91_5.0_EEC_Wiring_Diagram.gif
Vacuum diagram 89-93 Mustangs
http://www.veryuseful.com/mustang/tech/engine/images/mustangFoxFordVacuumDiagram.jpg
HVAC vacuum diagram
http://www.veryuseful.com/mustang/tech/engine/images/Mustang_AC_heat_vacuum_controls.gif
TFI module differences & pinout
http://www.veryuseful.com/mustang/tech/engine/images/TFI_5.0_comparison.gif