On June 13, 2016, during its E3 2016 press conference, Microsoft unveiled Xbox One S, a revision of the original Xbox One hardware with a streamlined form factor. Its new casing is 40% smaller than the original design, and supports vertical orientation with a stand.

The capacitive power and eject keys were replaced by physical buttons,the side USB port and controller sync button were moved to the front of the console, and its power supply is integrated into the console's casing rather than sitting externally.

Xbox One S requires a USB adapter to attach a Kinect sensor, as it no longer includes the proprietary port used on the original model. A free USB adapter was provided by Microsoft to Kinect owners who registered their ownership of Kinect and Xbox One S online, but this promotion ended in March 2017. Although Microsoft stated that it would eventually bundle the adapter with standalone Kinect units, this has yet to occur.