The first generation of the Paseo was made from 1991 to 1995. Based on the Tercel, the Paseo featured a 1.5 L E series 5E-FE I4 engine. In most places, the Paseo's engine was rated at 100 hp (74kW@6400 rpm) and 91ft·lbf (124Nm@3200 rpm) of torque. In California and other states with California level emissions standards, it was rated at 93hp (69kW) and 100lbf·ft (136Nm) of torque. It was offered with either a 5-speed manual transmission or a 4-speed automatic.
The second generation of the Paseo was introduced in 1996. Apart from some modernizing in the engine electronics, the only noticeable change was in the body sheetmetal. In 1997, a convertible model was introduced. However, this was the last year the Paseo was sold in the United States. Toyota stopped selling the Paseo completely in 1999. In order to reduce emissions levels, the second generation Paseo's engine was reduced to the same specifications as the California CARB models, delivering 93 hp (69kW) and 100lbf·ft (136Nm), this, another E series engine, the 5E-FE I4 engine.
It was sold in Britain from 1996 to 1998, but was withdrawn due to slow sales, as its bland styling failed to attract the number of customers that Toyota might have hoped.
Britain had three models in the Paseo range. ST, being the base Paseo, Si being the more advanced model, Adding 14 inch Alloy Wheels, Sony CD Player, Colour keyed boot spoiler with 3rd brake light and Anti-lock Brakes. Then there was the Limited Edition, Galliano. The Galliano was based on the Paseo Si, having all the features and more. The Paseo Galliano comprised of a colour keyed chin spoiler (also Optional Extra to lower Paseo models), mud guards, Yellow (576) paintwork with aquamarine decals down the sides. Along with the sporty, slightly wider 15 inch Alloy Wheels with low profile 195/50 Tyres. The second gen Paseo's colour codes are as follows: Sunburst Red: 3E5. Pure White: 040. Quicksilver (metallic): 1AO. Tropicana (metallic): 756. Azure (metallic): 8K9. Satin Black (metallic, Only available on the Si model): 205.