The second-generation Liteace wagon was released in October 1979. This was arguably the model that ignited the popularity of Toyota's 1-box wagons. In response to the rising demand for station wagons, the second-generation Liteace wagon further upgraded the equipment to enhance its attractiveness as a passenger car. It came with three rows of seats in a 2+3+3 arrangement to accommodate eight people, with fully reclining seatbacks for the second and third rows. Optional equipment included twin air conditioners, a 4-speaker "super-sound" audio system, and aluminum wheels. The high-roof GXL grade model also offered a sunroof option.

The engine was a 1,770 cc 4-cylinder 92 PS (13T-U), which was initially combined with a 4-speed manual transmission with a floor shifter, although the transmission lineup was expanded in December 1980 to include a 3-speed automatic and a 5-speed manual as well. At the same time, the dual turn seats that could face either forward or backward were added as an option, and the top-end grade FXV model joined the lineup. In 1981, a "handy-cab" version that could accommodate a passenger in a wheelchair was introduced. In January 1982, the Montana package for auto camping was added, featuring bunk beds and power curtains. At the same time, an 8-seat version with rear-facing second-row seats and auxiliary seats was made available. In April 1982, a medium roof version with a twin moonroof was introduced.

Power steering was adopted in a minor model change in October 1982, and the gasoline engine was upgraded to a 1,812 cc 95 PS LASRE 2Y unit, while a LASRE 1C diesel unit (1,839 cc, 63 PS) was also made available.