The cars were light, affordable, easily modifiable, and had a five-speed manual transmission, a limited slip differential (optional), MacPherson strut front suspension, near 50/50 front/rear weight balance, and a front-engine/rear-drive layout—at a time when this configuration was waning industry-wide.

The AE86 was featured centrally in the popular, long-running Japanese manga and anime series titled Initial D (1995–2013)—as the main character's drift and tofu delivery car.

In November 2021, Toyota temporarily restarted the production of a limited number of parts for the AE86, with dealers beginning to take orders for new steering knuckle arms and rear brake calipers.

The name AE86 derives from Toyota's internal code during the car's development, designating the 1600 cc RWD model from the fifth generation of the Corolla.

[19] The 4A-GE engines used in the AE86 and AW11 were also equipped with Denso electronic port fuel injection and T-VIS variable intake geometry.

Higher-spec American AE86 models known as the Sport GT-S featured the DOHC 4A-GEC engine, four-wheel disc brakes, had a T-series 6.7" differential, color-matched bumpers, front lower bumper surround with a much more sporty and pronounced lip, molded door panels, tachometer redline at 7500 rpm, leather-wrapped steering wheel, seats with leather-wrapped tops (front seats are completely different from Sport SR5), optional LSD, and aluminium wheels.

The VIN of the GT-S is AE88 (for North American market cars), however the chassis code on the engine firewall remained as AE86.

Lower-spec American AE86 models such as the Sport SR5 used the 1,587 cc (1.6 L) 4A-C SOHC unit, The S-series rear end was a 6.38" non-LSD with drum brakes.

The SR5 model also had a softer suspension, and small styling and interior changes such as seats, gauge cluster, door panels, un-painted matte black front and rear bumpers, the lower part of the front bumper surround is shorter and flat, and its VIN differs as well, being AE86 for the SR5 model (for North American market cars).

Another lower-spec American AE86 model was the base-model DX, which had the same 1,587 cc (1.6 L) 4A-C SOHC unit and 6.38" non-LSD rear end with drum brakes as the SR5.

While being near-identical to the SR5, the DX lacks many of the options and features that were present on the SR5 and GT-S, such as a smaller center console, no rear sway bars, no air-conditioning, and a very basic interior.

Minor bodywork changes were made in May 1985, which resulted in different taillights, updated bumpers with wrap-around front indicators, corner and headlight trim lights, interior, and grilles.

In Japan, the DOHC 4A-GEU AE86 was offered in GT, GT-V and GT-APEX trims as the Corolla Levin or Sprinter Trueno.

Both versions were sold with Trueno pop-up headlights and Levin taillights, and had longer, heavier 5 mph (8 km/h) regulated bumpers in the front and rear.

The Middle East received the same basic model as the North American market, with Trueno pop-up headlights, Levin taillights, and the regulated 5 mph (8 km/h) bumpers.

Options for this model include (but not limited to): limited slip differential (LSD), cruise control, power windows, power sunroof, digital instrument cluster, automatic air-conditioning, OEM aero sports package (available after Sep 1983), optional alloy wheels, Alpine sound system, fog lights on the Levin (Kouki models only), mudflaps, and rear hatch visor and quarter window billboards.

It features the interior of the AE86 GT, with a three-spoke steering wheel, smaller center console, sport seats, illumination dimming, and manual mirrors and windows.

Options include (but not limited to): two-tone paint colors, air-conditioning, power steering, power mirrors, rear wipers, limited slip differential (LSD), optional alloy wheels, OEM aero sports package (available after Sep 1983), mudflaps and body-colored bumpers.

Options include (but not limited to): air-conditioning, power steering, power mirrors, limited slip differential (LSD), optional alloy wheels, OEM aero sports package (available after Sep 1983), mudflaps, automatic transmission (Kouki models only), and rear defrost.

[24] In 1986 and 1987 Chris Hodgetts won the British Touring Car Championship (BTCC), beating the V8 Rover SD1's, Ford Sierra Cosworth's and BMW 3 Series (E30) M3's two years running for an overall points victory driving an AE86 for Toyota (GB) PLC and his own race prep team CHMS.

Keiichi Tsuchiya helped popularize the sport of drifting, which involves taking a car on a set of controlled slides through corners.

[19] The AE86's FR configuration made it well suited to this kind of cornering, and currently the car is a mainstay of drift shows and competitions.

Japanese drifters like Katsuhiro Ueo, Toshiki Yoshioka, Yoichi Imamura, Koichi Yamashita, Hiroshi Takahashi, Tetsuya Hibino, and Wataru Hayashi were also involved in making the AE86 famous in the drift scene.

The main character, Takumi Fujiwara, uses his father's AE86 Trueno GT-APEX liftback for racing and making his tofu deliveries.