The third-generation Corolla was placed on the market in April 1974. As the second-generation Corolla also stayed in the market for a while longer as a more affordable alternative, the new model was commonly referred to as the Corolla 30 to distinguish it from the older model.

The third-generation model expanded the wheelbase by 35 mm and the front and rear treads by 40 mm, partly to accommodate the devices to meet the emission and collision safety standards. The body variations initially included 2- and 4-door sedans, a 2-door hardtop, and 2- and 4-door vans. In January 1976, a 3-door liftback and a 2-door fastback coupé were added to the lineup, increasing the number of available body categories to five. The front designs of 1,200 cc and 1,400/1,600 cc models of the third-generation Corolla were clearly differentiated, whereas the corresponding second-generation models all looked more or less the same.

The mechanisms of the third-generation models followed those of their predecessors. The available engine displacements were 1,200 cc, 1,400 cc, and 1,600 cc. The 2-speed automatic gearbox was replaced with a 3-speed version. Responding to the increasingly stringent emission control, nearly all third-generation models successfully met the 1978 emission standards by the end of their model life. The U.S. collision safety standards also played an important part, leading to the adoption of shock-absorbing bumpers, protective body-side molding, and seatbelts with the emergency locking retractor (ELR) during the model life of the third-generation Corolla (excepting some models).

During its third generation, the Corolla became the No. 1 brand in the world in terms of the number of units produced.