Although the wagon and van were not renewed at the full remodeling of the Corolla sedan in 1983, they went through a substantial restyling in August 1987 to adopt a front-wheel-drive configuration for the first time. The model grades were also significantly expanded. The available engines included gasoline-powered 1.3-liter (LASRE 2E) and 1.5-liter (LASRE 3E) units and a 1.8-liter diesel unit (LASRE 1C-II), while the body variations were reduced to 4-door types alone. The available model grades for the van included the GL extra (for 1,500 cc models only), GL and Deluxe (1300cc, 1500cc, 1800cc diesel), Standard (1300cc, 1800cc diesel), and Long-deck Deluxe and Standard (1300cc, 1800cc diesel).

The maximum payload capacity was 400 kg when carrying two passengers, and 250 kg with five passengers. The payload capacity of the long-deck model, which had two front seats and no rear seats, was 400 kg. The wagon's model grades included G touring (for the 1500cc 16V engine model), GL, and Deluxe (1300cc, 1800cc diesel). An automatic transmission became available as an option for wagons starting with this model generation. There were no major mechanical differences between the van and the wagon, except in the rear suspension. The van inherited the rigid axle leaf spring suspension that had been used for two previous generations, while the wagon employed the same strut independent suspension as the sedan.