At the time of its initial release, the eighth generation Corolla was available in five different body types, including a 4-door sedan, a 2-door coupe and the van from the previous model, as well as a wagon and a hardtop (Corolla Celles), which had both undergone a minor model change. Later in January 1997, the MPV (known as the Corolla Spacio in Japan and New Zealand, and as the Corolla Verso in Europe) was added to the lineup as a new body type. The MPV in particular gained a favorable reputation for its diverse seat arrangements made possible with three (or two, depending on the country) rows of seats.

A total of five engine variations were available, including four gasoline engines and the 2.0-liter OHC (Over Head Camshaft) 2C-III diesel engine. The gasoline engines included the 1.3-liter 4E-FE, the 1.5-liter "High-mecha twin cam" 5A-FE and the 1.6-liter 4A-FE and 4A-GE engines. In August 1998, in the latter half of the model period, the 2C-III diesel engine was replaced by the 2.2-liter 3C-E engine.

The eighth generation Corolla was designed newly with a clean-cut taste, with a roomy cabin that was easy to get in and out of and with body panels utilizing simple, solid surfaces. With this model, the team pursued a well-balanced sedan design that would stay fresh for many years. While exploring new design tastes, the designers also pursued a design that contributed to excellent visibility and operability. Specifically, considerations were made for easy recognition of the front end and corner areas from the driver seat by providing an energetic hood relief that extended from the hood area to the headlamps. Likewise in the rear, superior functional beauty and a sense of high quality was also achieved with the rear combination lamps that emphasized a clean image, the lowered rear glass frame for better visibility in the rear direction, the ducktail shaped trunk lid and the lowered trunk opening height for ease of loading and unloading cargo.

The theme of the interior design was clean and comfortable, and with this theme, the design team pursued clear, refreshing taste with a high level of quality. Ample seating space was ensured while maintaining just the right size for a compact car, and a compact design with good visibility was realized without any sense of being cramped. The new model also featured superior usability, including controls that were easily within reach from a natural seating posture. Specifically, the overall interior width and height were expanded, and the front head clearance was enlarged upward, forward and sideways to further increase the sense of liberation. The instrument panel took on a generous, simple, horizontal design, and its height was lowered to reduce any sense of constriction on the passengers. Also, the center cluster, which in the past had been divided into three sections, was integrated for a more refreshed impression. Moreover, a luxurious image was expressed by adopting three-dimensionally designed door trim with integrated armrests and pockets.