The cars were produced from 1988 to 2001 (the last ones being sold for model year 2002) alongside the Corolla at NUMMI, an assembly plant operated as a joint venture of GM and Toyota.

The Prizm was sold exclusively in the United States and succeeded the 1985–1988 Chevrolet Nova, which was also derived from the Sprinter and produced at NUMMI.

Production of the newly-rebadged Chevrolet Prizm began in late 1997 as the Geo brand was phased out, alongside the newest North American generation of the Toyota Corolla.

The Prizm was introduced in February 1989 for GM's then-new Geo brand of import cars, for the 1990 model year.

The sporty GSi model of 1990–1992 was notable for its 130 hp (97 kW) twin-cam engine, sport suspension, disc brakes, and 14-inch wheels, which made it as a spiritual successor to the 1988 Chevrolet Nova twin-cam but less of a limited edition, available in both body styles and a full array of colors compared to the earlier model's black-only color and sedan-only body style.

The Geo Metro sedan was not available from Chevrolet dealers in the United States until 1995, although a Suzuki Swift-branded version was on sale from 1990.

The Prizm gained more room (resulting in an upgrade to United States Environmental Protection Agency "compact" car status), a driver's-side airbag, and a new 1.8-liter four-cylinder engine optional on LSi trim.

Although these efforts theoretically would have decreased oil burn, a flawed piston ring design affected all engines without VVT-i.

Due to decreased sales, low popularity, and being in competition with the Chevrolet Cavalier and GM's more direct competitor to the Corolla the Saturn S-series, the Prizm was replaced by the Pontiac Vibe starting in 2003.

The third-generation Prizm headlight, front turn signal, and taillight assemblies were also different, making them notable exceptions in a car that shared almost all of its parts with the Toyota Corolla through each of its model years.