For 1998, Volkswagen scaled back its list of special-edition Golfs. The Jazz and Trek, available the previous year, were gone. Only the Golf K2, designed to appeal to winter sports enthusiasts, remained. It came with either skis or a snowboard, special upholstery and gauges, and an upgraded stereo system, among other special features.

The Golf K2, as well as the base-model GL and the higher-end Golf GTI, came with a 115-hp, 2.0-liter 4-cylinder engine that had been the workhorse of the Golf fleet for a number of years. It was linked to a five-speed automatic transmission, which was standard. A four-speed automatic was optional. The GTI VR6, also part of the Golf lineup, received a 172-hp, 2.8-liter V6.

New for 1998 was the Volkswagen Golf Wolfsburg Edition, which came with air conditioning, a power moonroof, upgraded upholstery and gauges, foglights, a leather-wrapped steering wheel, and an upgraded sound system.

Standard features for the Golf included power door locks, power brakes, power steering, dual airbags, and an anti-theft alarm system. The GTI and GTI VR6 added anti-lock brakes, air conditioning, a moonroof, and alloy wheels.

The 1998 Volkswagen Golf got enthusiastic high marks from many drivers, who thought the car was comfortable, handling, and fuel economy. A number of drivers, however, noted that the car needed frequent, and often expensive, repairs. The electrical system was noted as particularly problematic.