Assembled In: Fukuoka, Japan.

Model Line Up: Toyota Highlander; AWD; Sport; Sport AWD; Limited; Limited AWD; Hybrid; Hybrid Limited.

Model Tested: Toyota Highlander Sport AWD.

Options Tested: leather upholstery, 10-way power adjustable driver seat and four-way power front passenger seat, heated front seats, JBL audio with nine speakers; Bluetooth hands-free cell phone link; power rear tailgate.

The Toyota Highlander is completely new for 2008. After seven successful model years, the Toyota Highlander has been redesigned and re-engineered to enhance its strengths. The new version is bigger and roomier. It's also been made more powerful, though not at the expense of fuel economy.

The 2008 Toyota Highlander is larger than its predecessor in every dimension. Those larger dimensions add up to increased cargo and passenger volume.

The 2008 Toyota Highlander is an even better people mover than its predecessor. The second row can slide forward and back, and the third-row seat changes from an afterthought to a space hospitable for children and capable of carrying adults. Getting in and out of the first two rows is easy, and Toyota provides both a walkthrough and a fold and slide forward second-row seat to ease access to the third row.

The Highlander is moving slightly upmarket for 2008. A four-cylinder engine is no longer an option and the base six-cylinder engine has been upgraded. The standard 3.5-liter V6 is larger and dramatically more powerful than last year's engine. Rated at 270 horsepower, it offers an increase of 55 hp over the old engine. In spite of this, fuel economy has been slightly improved. The 3.5-liter V6 is buttery smooth, as is its five-speed transmission, which downshifts seamlessly to provide ample passing punch. Front-wheel-drive Highlanders get 18/24 mpg City/Highway. All-wheel drive models are rated slightly lower at 17/23 mpg.

Hybrid models keep the same 270-hp gas/electric power train as the 2005-07 models. The hybrid also provides smooth, plentiful power. The hybrid powertrain is rated at 27/25 mpg City/Highway. While the EPA ratings are not as good as those of the 2007 model (rated 31/27 mpg), fuel economy from the 2008 Highlander is slightly better in real-world driving. EPA test procedures have changed for 2008 models and now are closer to what consumers can expect to get.

Highlanders come standard with front-wheel drive with all-wheel drive available for customers who want all-weather capability and enhanced safety. Hybrids come standard with all-wheel drive.

The Highlander is a so-called crossover SUV, meaning it's built more like a car than a truck. The Highlander is based on the architecture of the Toyota Camry midsize sedan. As a result, the Highlander offers a quiet cabin and a luxurious ride quality. Overall, we found the 2008 Toyota Highlander to be a pleasant way to a group of people.

The 2008 Toyota Highlander comes in base, Sport and Limited trim levels, each with front- or all-wheel drive. The two Hybrid models are base and Limited, and both are offered only with all-wheel drive.

Highlander comes standard with air conditioning; cloth upholstery; three-row seating for up to seven passengers; a 40/20/40 second row seat with a removable center section that can be stowed under the first-row center console; a fold-flat third row; AM/FM/CD with six speakers and MP3; power windows, door locks, and mirrors; remote keyless entry; cruise control; variable intermittent wipers; rear defogger with variable intermittent wiper; rear spoiler; tilt/telescope steering wheel; and two front and one cargo-area 12-volt power outlets; fog lights; 245/65R17 tires on alloy wheels.

Hybrid models get Toyota's Smart Entry System that includes keyless entry and starting, a 3.5-inch multifunction display screen that includes a rear backup camera, a clock, tire-pressure display, air conditioning readout, and outside temperature and trip computer information, in addition to all the hybrid-related features. Also, base Hybrids come standard with two seating rows; the third row is optional.

Sport models add 245/55R19 tires, sport-tuned suspension, opening rear glass, a rear tonneau cover, cargo area levers to fold the second-row seats, and the multi-function display.

Limited models lack the Sport's sport-tuned suspension, but have all of its other features plus foldable power outside mirrors with puddle lamps, leather upholstery, 10-way power adjustable driver seat and four-way power front passenger seat, front dual-zone automatic climate control, and Homelink universal transmitter.

Limited Hybrid models add to base Hybrids 245/55R19 tires, opening rear glass, rear tonneau cover, power rear door, three-row seating, leather-wrapped steering wheel with controls for the audio system and multifunction display, cargo area levers to fold the second-row seats, and an eight-way power-adjustable driver seat.

Options include leather upholstery, a navigation system, front dual-zone climate control, automatic rear air conditioning, heated front seats, upgraded JBL audio with nine speakers and a Bluetooth hands-free cell phone link, sunroof, power rear tailgate, rear DVD entertainment, and a towing package that gives the Highlander a 5,000-pound tow rating.

Safety features on all models include dual front airbags, front side-impact airbags for thorax protection, head-protecting curtain side airbags that cover all three seating rows, a driver's knee airbag, active front headrests, tire-pressure monitor, antilock brakes, traction control, antiskid control, and hill-start assist. Hill descent control is standard on AWD models.

Its increased size puts the 2008 Toyota Highlander in the heart of the midsize SUV market. The new Highlander is about the same size as the Honda Pilot. Highlander's 95.4 cubic feet of cargo room is more than all but a handful of competitors in the popular midsize class.

At 188.4 inches overall, the 2008 Highlander 3.8 inches longer than the pre-2008 models. It's also 3.3 inches wider and 3.8 inches taller, and the wheelbase has grown from 106.9 to 109.8 inches. The weight is up some 300 pounds.

Highlander fits in the middle of Toyota's three-pronged midsize SUV lineup. Highlander features softer styling than the midsize 4Runner SUV and the retro-styled FJ Cruiser; truck-based platforms, rugged suspensions and low-range transfer cases make 4Runner and FJ Cruiser highly capable off road. The Highlander is based on the same architecture that hosts the Camry and Avalon sedans. Highlander's all-wheel-drive systems are designed for taming slippery pavement and wintry conditions, not for climbing rocks and traversing rough terrain.

The design of the Highlander is cleaner than that of the pre-2008 models. It is accentuated by a side character line that leads into pronounced wheel arches. The look is more muscular than the previous-generation models, tending more toward SUV than station wagon. Available 19-inch alloy wheels add to the more muscular stance.

Alloy wheels come standard, so every Highlander looks well-equipped. Hybrid models are differentiated by blue-tinted lighting, a special grille, and unique alloy wheels.

The 2008 Toyota Highlander is all-new. It offers more room and more power than the 2001-07 models without giving up any fuel economy. Highlander Hybrid models offer excellent fuel economy, particularly in the stop-and-go traffic of major metros, along with extremely low emissions. Add in Toyota's reputation for reliability and resale value, and the 2008 Highlander is a wise choice for active families.

Kirk Bell filed this report to NewCarTestDrive.com after driving the new Highlander models in Arizona.