Introduced in July 1990, the second-generation front-engine, front-wheel-drive Camry adopted slightly different body dimensions for domestic and overseas models, the former featuring narrower body widths (1.7 meters or less) so as to fit into the small "5-number" car category. Both 4-door sedan and 4-door pillared hardtop versions featured more rounded exterior styling. The sedan adopted pressed doors with integrated window sashes. The body length was extended to 4,600 mm for the sedan and 4,630 mm for the hardtop. The wheelbase remained the same at 2,600 mm, although the spaciousness and the ride comfort level were improved to compete with the Crown.

The available power plants were three twin-cam 16-valve gasoline engines, including 1,998 cc 165 PS (3S-GE), 1,998 cc 140 PS (135 PS with the 4-wheel-drive model) (3S-FE), and 1,838 cc 115 PS (4S-FE) units, as well as two turbo diesel engines including a 1,974 cc 91 PS (2C-III) unit and a V6 2-liter 140 PS (1VZ-FE) unit, the latter exclusively for the Prominent model. The 4-wheel MacPherson strut/coil suspension remained unchanged, though the wheel-stroke-sensitive TEMS was added as an option for higher grade models. Also, the vehicle-speed sensitive 4-wheel steering system was made available to selected FF models.