The model received a facelift in early 2004 with updated bumpers and engines, while body-coloured bumpers were made standard on all trim levels.The Xsara Picasso was available with a 1.6, 1.8 and 2.0 litre (automatic only) petrol engines, or a choice of 1.6 and 2.0-litre (replaced by the 1.6-litre 2004 onwards) diesels, all shared with the smaller Citroën Xsara apart from the 1.6 diesel.

[2] On 22 March 2007, Auto Trader reviewed the Xsara Picasso, calling it the most popular MPV in the United Kingdom, "thanks to a combination of practicality and affordability".

Since 2001, the Xsara Picasso was produced in Porto Real, Brazil for the market in Latin America, where it was the top selling vehicle in its class for a while.

[4] In December 2002, Citroën do Brasil launched a limited edition called Xsara Picasso Etoile, celebrating the victory of Lula from the PT at the 2002 Brazilian presidential election.

[5] The model was restyled again in 2007 in China and South America, with the grille adopting wide chrome bars.