Computers were widely used to engineer the engine and design of the fifth generation Corolla, and numerous world-first mechanisms were adopted in the newly developed engine. In addition, a truly innovative vehicle was developed with more than 500 patent and utility model applications made during developments. On the other hand, Agetsuma stated the following concerning developments at that time: "The Corolla has a continuous responsibility of being the 'bread and butter' for various people in nations throughout the world. We placed emphasis on the basic areas that have the greatest impact on passengers even though those areas may be low-key. For example, we used sound proofing and vibration proofing technology and achieved an incredible level of quietness. Even when we drove the vehicle at 170km/h on the Autobahn in Germany, it provided a comfortable, secure feeling." He also stated, "When Ove Andersson, a professional rally car driver, and other European specialists praised the vehicle for being a step above European vehicles in the same class, it was more wonderful than someone praising my own son." This fifth generation Corolla was created for the world market in May 1983.

The fifth generation Corolla entered the market with five body types, including the 4-door and 5-door (the former liftback) models in the sedan series, the 2-door and 3-door models in the coupe series and the wagon. Later in October 1984, 3-door and 5-door model hatchbacks that focused on overseas strategy were added to the lineup. Furthermore, sales of the fourth generation wagon and van models continued without any model changes, and as a result, a total of nine body types were available during that time.

Gasoline engine variations for the sedan series included the newly adopted 1.3-liter OHC (Over Head Camshaft) 2A-LU engine, the transversely mounted 1.5-liter OHC 3A-LU engine converted from the former 3A-U, and the newly developed 1.6-liter OHC 4A-ELU engine with an EFI system. The 1.8-liter 1C-L diesel engine, which switched the former 1C engine to a transverse mount, was also available.

In addition to offering the 1.5-liter OHC 3A-U II engine from the previous model for use in coupe models, which emphasized a sporty drive, the newly developed 1.6-liter DOHC (Double Over Head Camshaft) 16-valve 4A-GEU engine was also made available.

In October 1984, the 4A-GELU engine, the L indicating that it was a converted version of the 4A-GEU to be mounted transversely, was offered in the sedan series and hatchback (Corolla FX). Also, in May 1985 in the latter half of the model period, the 2A-LU engine was replaced by the newly developed 1.3-liter OHC 2E-LU engine.

The fifth generation Corolla adopted the FF drivetrain in the sedan and hatchback models, and the FR drivetrain in the other models. To better emphasize a sporty image, all coupe models, which continued to use the FR drivetrain, were unified with the vehicle name "Corolla Levin" regardless of the type of engine used.

The design concept adopted for the fifth generation Corolla was "Let's return to the first generation Corolla." The essence of this design concept was to create original style for the fifth generation with technological innovations, such as conversion to FF, while achieving innovation like that of the first generation model. The major policy at the startup of design was to fully utilize the merits of the FF drivetrain, create as spacious an interior as possible and adopt a style directed at the younger generation. The exterior, which was designed with awareness of the younger generation, featured a large slanted nose and rounded wedge shape that emphasized surface beauty. Concerning this style, Agetsuma stated, "I think that the gently curved silhouette will create a new trend in world car designs."