Forward collision warning (FCW) systems function by alerting drivers to upcoming forward hazards, and have been shown to help drivers respond more quickly under emergency situations. As FCW directly affects how vehicles interact longitudinally with one another, it may also influence behavior more specific to car-following, such as time headway and reaction time. To investigate this effect, driving data were collected from the Shanghai Naturalistic Driving Study. Five data collecting vehicles were equipped with Mobileye® systems, which included an FCW function with headway display and warning system. Participants drove the vehicles for two months, with the Mobileye® system activated for the second month only. From the 161,055 km of naturalistic driving data collected by 60 drivers, 2,827 car-following events were identified, and the effects of FCW were investigated. Parameter changes in a fundamental car-following model were also examined to see how the system affected internal car-following mechanisms. The results showed that (1) drivers tended to maintain a shorter headway with the FCW system enabled, while the proportion of time in short headways did not increase; (2) the FCW reduced car-following reaction time when the lead vehicle was accelerating and when the relative speed between the lead and following vehicle was large; (3) a reduction in the space headway exponent of the Gaxis-Herman-Rothery model was observed when the FCW was enabled, indicating that drivers follow more closely with the FCW because the system helps them become more sensitive to the changes in inter-vehicle spacing. As traffic efficiency and stability are negatively related to headway and reaction time respectively, results of this study suggest that an FCW system with a headway monitoring function may increase traffic efficiency and stability without degrading safety. Active safety systems (such as FCW) and vehicle-to-vehicle (V2V) communication technologies are therefore recommended for future transport systems. Moreover, this study provides meaningful insights on incorporating the impact of V2V communication into traditional car-following models.