The car was initially available with a 2.0-litre Twin Spark (155PS), a 2.5 V6 (190PS), a 3.0 V6 (226PS) or a V6 2.0 Turbo (205PS) petrol engine. Diesel engines were an L5 2.4 10v common rail turbodiesel version with 136, 140 and 150PS output, praised for its refinement. The TS model used a 5-speed manual gearbox, whilst the 2.5 and 3.0 had the option of a Sportronic automatic gearbox. The 3.0 V6, L5 2.4 and V6 Turbo were otherwise supplied with a six-speed manual gearbox.
The top models were named "Super" and included MOMO leather interior, 17" alloy wheels, rain sensitive wipers, cruise control, climate control and ICS (Integrated Control System) with colour screen. Options included xenon headlamps, GSM connectivity and satellite navigation. Suspension systems comprised double wishbones at the front and a multi-link setup for the rear.
The 166 underwent a substantial revamp in 2003. As well as upgrades to the chassis, interior, and the engine range, the styling was substantially altered. The new front end resembled the also recently revamped 156, and lost its famous drooping headlights. The 2.0 V6 Turbo model was dropped because of marketing problems, the V6 2.5 was re-rated at 188PS and a 3.2 litre V6 (240PS) was introduced. Both the new 3.2 litre and the 2.0 Twin Spark models now featured the six-speed manual gearbox, whilst the 3.0 model was retained but made available only in Sportronic form. In the diesel sector, the L5 2.4 was re-engineered with Multi-Jet technology which allows up to 5 injections per cycle, second stage common rail with maximum injection pressure of 1400bar and 4 valves per cylinder to output a class leading 175PS.
Though the car's handling characteristics, engine range and elegant exterior design received praise from many, including Jeremy Clarkson, it did not become a strong seller to rival the dominant German brands in the European executive car sector.
The Alfa Romeo 166 was withdrawn from sale in right-hand drive markets in October 2005. Sales of the 166 never grew as Alfa had hoped following the 2003 facelift, and the additional lack of a diesel engine in the UK, Australian, and Irish markets limited its reach into company car sectors.