This engine was popular with Japanese buyers due to reduced tax liability based on Japanese vehicle size legislation; the car offered performance advantages over larger cars sold in Japan with bigger engines but with a smaller tax bill.

Strength is also an advantage of the boxer design – the crankshaft is sandwiched between the left and right hand crankcases and is supported by 5 main bearings.

During the primary turbo stage, boost pressure is controlled by a conventional arrangement of an ECU-controlled duty-cycle solenoid and an internal wastegate.

During the 4000–4500 rpm transitional stage, however, the exhaust control valve is partially opened, bringing the secondary turbo up to near-operating speed.

The ECU – working with another duty solenoid and vacuum diaphragm – determines the amount that the exhaust control valve opens.

The ECU calculates this amount of valve opening based on the input of a differential pressure sensor that takes feeds from the intake manifold and the outlet of the secondary turbo.

Any boost pressure produced by the secondary turbocharger during the transitional stage is redirected to the atmospheric side of the compressor inlet (between the turbos and air filter).

Subaru claims: "The 'staging' between the single and twin-turbo operating range, which was quite noticeable to the driver on the previous model B4, has now largely been 'tuned out' by the careful selection of turbocharger size and the controlling mechanisms.

As can be seen from this torque curve, however, under some driving conditions it is still possible to detect a slight reduction in the rate of acceleration in the preparatory or intermediate phase that occurs between 4000–4500 rpm."

The gears are now cold forged and shot peened for added strength and a flexible flywheel design is now incorporated to reduce engine vibration reaching the driveline.

The front suspension incorporates cast aluminium L-shaped transverse links and the cross member features a newly devised 'performance rod'.

The B4's initial spring, damper, and swaybar specifications were devised in Japan and later tuned at the Nürburgring circuit.

An increased diameter vacuum assisted tandem booster gives reduced pedal effort though relatively firm braking feel (see graph).

The system is diagonally linked to maintain safety in the event one line should fail, and front and rear pressure control valve are used to balance braking force to suit weight distribution.

Electronics A combined key, remote central locking transmitter and immobiliser transponder protects the Liberty B4 from theft.

In addition to the key immobilizer, Subaru Australia also installs a dual-stage security system (as came fitted to previous Impreza STis).

American car audio company McIntosh spent 12 months in Japan customizing a sound system to suit the acoustics of the B4.

The system features a high-performance digital to analog (D/A) converter, 20-bit Burr-Brown chips, Dolby B noise reduction (tape), dual-antenna AM/FM radio, and McIntosh's Power Guard technology, which gives low distortion at high sound pressure levels.

The fourth revision of the third-generation Legacy, introduced in 2001, made several subtle but important changes to the front of the car.

Compression and timing changed in order to further reduce the effect of loss of boost during the switch over from the primary to secondary stages.

Additional optional extras were offered upon purchase including but not limited to; a new body kit, headlight surrounds, and 4-pot brakes – the stock wheels were designed to accommodate this upgrade.

It came standard with a 165 hp (123 kW) SOHC EJ252 and a 5-speed manual transmission, rear drum brakes, steel wheels with hubcaps, an AM/FM radio and cassette, and other basic features but lacked roof rails, a tachometer, wiring for keyless entry, power locks, cruise control, and some other features that were available on the L trim.

From 2003 to 2004, the L had gained standard features in the Special Edition (2003) and 35th Anniversary Edition (2004) such as the "snowflake" style 16" alloy rims from the 2000 to 2002 GT, painted plastic body molding, door handles, and mirrors, dual sunroofs on the wagon and a single sunroof on the sedan, simulated interior wood trim, a CD player, leather-wrapped shift handle and steering wheel, and other features only previously available on the GT.

It included dual-beam single bulb headlights, unpainted plastic door handles, mirrors, and body molding, an AM/FM cassette radio, steel wheels with hubcaps, and manual climate controls.

This trim featured automatic climate control, upgraded 15" mesh alloy rims, foglights, and a standard CD player.

The RS25 was a performance model featuring an upgraded 170 hp (130 kW) naturally aspirated DOHC 2.5 L EJ254 along with Bilstein shocks.

It also featured an implementation of Aisin Seiki's new sequential automatic gearbox,[9] the first use of sequential-shifting on a production Subaru model.

It came standard with manual climate controls, an AM/FM cassette stereo, rear drum brakes, and a 125 hp (93 kW) 2.0 L SOHC EJ20E.

The GX came standard with a 153 hp (114 kW) 2.5 L SOHC EJ251, automatic climate controls and an upgraded CD player.

The automatic transmission also has the ability to change the shift points, and hold the gears longer when the engine is operating at a higher RPM.