With its third and last generation model, the Celsior fully renovated itself to further refine its high quality which was also the hallmark of the Lexus brand.

Its external styling was characterized by the ample use of curved surfaces, which yielded the low drag coefficient of 0.25, which was among the best in the world for production cars. The wheelbase was extended by 75 mm but the length remained virtually unchanged, resulting in shorter overhangs. The height was extended by 55 mm, giving more space to the cabin while improving the vehicle dynamics. The V8 DOHC 32-valve engine increased its displacement to 4,300 cc (although the output remained the same at 280 PS). The number of electronically controlled devices significantly increased, and all doors came with the "easy closer" device that could automatically lock half-locked doors. The Celsior's environmental performance also improved substantially with this model generation.

The design of headlamps, hood, fenders, and trunk lid was refined in a minor model change in August 2003. The automatic transmission changed its gearbox from 5- to 6-speed, and the fuel efficiency under the 10-15 mode test cycle improved by 8.5%. The tire size also increased, with the A and C grade models using 17-inch wheels with 55 aspect ratio tires, and the eR grade model using 18-inch wheels with 45 aspect ratio tires. Marketing of the Celsior was discontinued in 2006, following the inauguration of the Lexus brand in Japan in August 2005.