The Toyota Corolla was redesigned for 1988, replacing the rear-drive coupe and liftback with a front-drive coupe. Across the board, the body was much less distinct than the previous generation, and almost an inch wide on the same wheelbase. For the first time, All-Trac four-wheel drive was an option on the wagon.

The 1988 Toyota Corolla came in many body styles with several trim levels. The sedan came as a base DX or better-equipped LE. The wagon was available as a DX or SR5. The coupe came as a SR5 or GT-S. The coupe hatchback only came as the FX. All Corollas came equipped with a DOHC, 16-valve inline four-cylinder engine. The sedans, front-drive wagon and SR5 coupe had a carbureted 90-horsepower engine; the All-Trac wagon had a fuel-injected 100 horsepower engine, and the GT-S had the most powerful with a 115-horsepower EFI version. Fuel economy is about 25 to 35 mpg, depending on the engine.

Many drivers of the 1988 Toyota Corolla have been driving their cars for a decade or longer. Owners also say that it handles well in the snow. Some drivers have had problems with the electrical system, and others complain about the lack of power.