In 1997 for the 1998 model year, the RAV4 was slightly restyled on the front and rear fascias, and a soft top three-door was made available.

Produced from 1997 to 2003 for fleet lease, this "zero emission" model was only offered for public sale for seven months in 2002, in very small quantities in California.

Like the previous model, the XA20 was available in three- and five-door configurations and was constructed on a platform that shared Carina and Corolla elements.

All models came equipped with a brand-new 2.0-litre four-cylinder engine featuring VVT (variable valve timing), resulting in improved power and torque, as well as fuel consumption.

The second generation RAV4 enjoyed success in Australia, where it became the best-selling SUV in the country in 2001, overtaking its rival the Honda CR-V for the first time.

In Australia, for the facelift, the base Edge was renamed CV, and gained standard air conditioning (previously an option).

In 2005, a new "CV Sport" model was added to the range in Australia, which included a non-functional bonnet scoop, giving the RAV4 a more aggressive appearance.

The second generation RAV4 had the highest proportion of female drivers among all makes and models in the United States, with the possible exception of the Volkswagen New Beetle, according to 2003–2004 registration and survey data.

Beginning in November 2008, vehicles for the North American market were built in the Toyota Motor Manufacturing Canada Inc. at the new West Plant in Woodstock, Ontario.

As it was often the case in Japan-only vehicles, the Vanguard comes loaded with high-tech gadgets, including steering-assisted stability control, keyless entry and satellite navigation.

Unlike the North American variant that came with a 4-speed automatic gearbox, the Japanese RAV4 (or Vanguard) is equipped with a simulated 7-speed transmission from the K112 line also known as Super CVT-i Sports Sequential Shiftmatic.

For the refresh of 2009 the roof rack in the Base model was eliminated as standard equipment and the Sport trim was added to the line-up.

The China-specific model had different styling compared to those sold in other countries, with a black strip that was placed in between the radiator and license plate like a moustache.

The license plate was also moved to the bottom bumper area to make way for the RAV4 logo and a rear fog lamp.

Toyota worked together with Tesla Motors to develop the second generation RAV4 EV; the electric SUV was scheduled for market launch late in the third quarter of 2012.

[49] About 2,500 RAV4 EVs were built between 2012 and August 2014, with the battery supply deal between Toyota and Tesla concluding with the end of production.

The four-wheel drive came equipped with a second, 50 kW high-voltage, a rear-mounted electric motor that offers increased traction and a 1,750-pound (790 kg) towing capacity.

For the Japanese market, the previous generation in short-wheelbase length remained on sale in Japan until 2016 instead of the newer, export only, XA40.

The facelift included redesigned LED front and rear lamps and updated speedometer dials with full color TFT multi information display.

The RAV4 Premium is a concept vehicle with Deep Bronze body color, bumpers in Deep Bronze, chrome-finished spoiler, chrome inserts in the rear bumper, brushed aluminium skid plates, integrated tailpipe at the rear bumper, 20-inch wheels, leather interior upholstery designed by Toyota's Kansei design department, seats with black piping and V-shaped outline, two-tone double stitching and grey and black leather on the instrument panel and door panels.

[69] In the Insurance Institute for Highway Safety (IIHS) evaluations, the 2013 and 2014 model year RAV4 achieved a "good" crashworthiness rating for head restraints and seats, roof strength, side, and moderate overlap front, while achieving a "poor" rating in the IIHS Small Overlap Frontal Test.

Modifications were made starting in the 2015 model year which increased the small overlap front rating to "good".

[70] The small overlap test, introduced in 2012 by the IIHS, simulates a frontal collision on 25 percent of the driver's side.

The model incorporates a multi-link rear suspension to which is claimed to provide more ideal damping for handling, lesser interior cabin noise, and enhanced ride comfort.

[84] The fifth-generation RAV4 also introduced a newly developed four-wheel drive system, marketed as "Dynamic Torque Vectoring AWD".

It has Multi Terrain Select providing operators an ability to maximize traction when driving on sand, mud, rock, or dirt.

[107] Imported from Japan, it is offered in a single grade level (GR Sport) and only powered by the 2.5-litre A25A-FXS plug-in hybrid powertrain.

[110] In the Kingdom of Saudi Arabia, the fifth-generation RAV4 was launched in April 2019, with availability in eight exterior color choices and three interior (light grey, beige, and black).

[113] Fuel economy is estimated by the EPA in to be: A plug-in hybrid electric (PHEV) variant of the RAV4 was unveiled at the December 2019 Los Angeles Auto Show.

The testers noted "dangerous behavior" on the cone course, and that the electronic stability control "engaged very late", causing both vehicles to hop up on their outer tyres multiple times during the test.