The transmission basically followed that of the sixth generation Corolla. Priority was focused on the shift feeling for manual transmissions, and subtle changes were made to the unit and its operating system. These changes included adopting a triple-cone synchromesh, adding a shift wire moderation adjustment mechanism and making changes to the shift knob. The daring adoption of a heavier shift lever with mass damper — a first for Toyota — led to minimal vibration and a good shift feeling. In automatic transmissions, the newly developed Super flow torque converter was adopted to achieve powerful departure and acceleration performance and to significantly improve fuel efficiency.

Similar to the sixth generation Corolla, a 4-wheel strut suspension was adopted with L-type lower arms in the front and dual-link arms for the rear. The component parts and characteristics were reviewed, and superior handling stability was ensured. In addition, the TEMS (Toyota Electronic Modulated Suspension) was adopted in higher grade models. For enhanced comfort, the former 2-step setting of "SOFT" and "HARD" was upgraded with the addition of a third step, "MEDIUM," making possible a finer adjustment of damping characteristics.

Separate from these suspensions, a newly developed Super-strut suspension was made available for the Coupe (Levin) and 3-door hatchback (FX). This suspension, which provided high cornering performance comparable to a double wishbone configuration, supplemented the weaknesses of the conventional MacPherson strut suspension and minimized extreme wheel alignment changes by suppressing the tilt of the tires when cornering. Also, unstable vibration and torque steer, which had been the weak point of front wheel drive vehicles with high output engines, were reduced. This allowed the tires to exhibit their full potential, and, as a result, overall cornering performance was significantly enhanced.

For the steering mechanism, rack & pinion steering similar to that of the sixth generation Corolla was adopted. Two types of steering mechanisms were available in the seventh generation Corolla, including the proven engine speed sensitive power steering and the newly-adopted New Progressive Power Steering. The newly-adopted steering system controlled the firmness of the steering wheel according to vehicle speed and road surface reaction force. This enabled easy operation at low speeds, which was light enough to be turned with one finger, and a firm and stable steering feel at high speeds.

In the development of the seventh generation Corolla, the team pressed onward with efforts to increase quality beyond the boundaries of family cars — a task set forth by the sixth generation — and paid close attention to every detail. For the interior space, comfortable seating space was achieved by primarily expanding the head clearance, rear legroom and interior width. To improve comfort in the rear seat in particular, the arrangement of the seat rails of the front seat was reviewed, and the rear seat leg space was expanded. The switches were completely redesigned and converted to switches that are easy to operate with an improved operation feeling. In higher grade models, automatic air conditioning was adopted as standard equipment. Other deluxe equipment was prepared, including vehicle speed sensitive door locks, automatic headlamps, a clearance sonar that detected obstacles and urged caution to the driver and a wireless key-less entry system. As a result, an increase in quality was achieved that went beyond expectations and significantly exceeded the boundaries of family cars.

Various safety devices were made available in the seventh generation Corolla to accommodate the customers' increased consciousness toward safety. Equipment was enhanced in line with that of present day vehicles. The 4-wheel Anti-lock Brake System (ABS) used to suppress tires from locking during sudden braking, and the high mount stop lamp, which increased visibility for trailing vehicles, were made available as options on all models. In addition, a computer analyzed collision safety body structure, driver's seat SRS (Supplemental Restraint System) airbags and side door beams were adopted. Furthermore, safety performance also was considered from a hardware aspect and efforts were made to ensure braking force. This included adopting ventilated front disc brakes in all vehicles, and, in some models, large diameter disc rotors and opposed piston brake calipers.