With the fourth generation of the Supra, Toyota took a big leap in the direction of a more powerful sports car. The new Supra was completely redesigned and featured two new engines, namely a naturally aspirated 2JZ-GE with 220 hp and 210 lb-ft of torque, and a twin turbocharged 2JZ-GTE with 320 hp and 315 lb-ft of torque. The turbocharged variant could run the 0–60 mph sprint in 4.6 seconds and do the 1/4 mile in 13.1 seconds at 109 mph. The stock turbos are capable of running around 450-500 hp with an unrestricted airflow/exhaust system and an aftermarket boost controller.

Popularly known as the MKIV Supra, as in Mark 4, its twin turbos actually operated in sequential mode instead of the more common parallel mode. The sequential setup featured a pair of small, equally sized turbos, with ceramic blades for the domestic Japanese market and steel blades for export (USA, UK) markets. At first, all of the exhaust is routed to the first turbine for reduced lag. This resulted in boost and enhanced torque as early as 1800 rpm. Approaching 4000 rpm, the exhaust is routed to the second turbine for a "pre-boost" mode, although none of the compressor output is used by the engine at this point. Approaching 4500 rpm, the second turbo's output is added to the intake air, and both turbos operate in parallel. Most cars which are advertised as "twin turbo" operate by having the two equally sized turbos constantly running in parallel; the turbos spool up at the same time. The sequential mode provides greater low-end response at the expense of top-end output.

For this generation, the Supra received a new 6-speed Getrag transmission on the Turbo models while the normally aspirated models made do with a 5-speed manual. Both models were offered with a 4-speed automatic with a manumatic mode. However, the turbo model used 4-piston brake calipers on the front and 2-piston calipers for the rear. The base model used 2-piston calipers for the front and a single piston caliper for the rear. The turbo models were fitted with 235/45/17 tires on the front and 255/40/17 tires for the rear. The base model used 225/50/16 for the front and 245/50/16 for the rears. All vehicles were equipped with 5-spoke aluminum alloy wheels and a "donut" spare tire on a steel wheel.

Toyota took measures to reduce the weight of their current model compared to the previous model. The Supra featured hollow carpet fibers. Aluminum was used for the hood, targa top (if so equipped), front crossmember, oil pan, and upper A-arms. Other measures included dished out head bolts, magnesium steering wheel, plastic gas cover, gas injected rear spoiler, and a large single exhaust tip. Despite having more features such as dual airbags, traction control, larger brakes, larger wheels, and larger tires, the car was around 200 lbs lighter than its predecessor.

For the 1996 model year, the turbo model was only available with the automatic transmission due to OBD2 certification requirements. The targa roof was made standard on all turbo models. For 1997, the manual transmission is back for the optional engine along with a redesign of the tail lights, front fascia, chromed wheels, and other minor changes such as the radio and steering wheel designs. All 1997 models included badges that said, "Limited Edition 15th Anniversary." For 1998, the radio and steering wheel were redesigned once again. The naturally aspirated engine was enhanced with VVTI which raised the output by 5 hp and 10 ft·lbf of torque. The turbo model was not available in California, New York, and Massachusetts due to increased emission regulations.

MKIV Supras have been modified (larger turbos running 30+ psi of boost and other, undisclosed tweaks) to produce over 1000 rwhp and drive the 1/4 mile in 7.9 seconds. The stock 2JZ-GTE engines are astonishingly tough, running 1000 hp+ (850 rwhp) without having to update any internal components, putting it in par with Nissans legendary RB26 series engine. The stock MKIV Supra chassis has also proven a very effective platform for roadracing, with, for example, several top 20 and top 10 One Lap Of America finishes in the SSGT1 class.