The Nissan Xterra was launched as a small sports utility vehicle that was built on the Nissan F-Alpha body in 2000. The vehicle was available with either rear-wheel or four-wheel drive. The Xterra was available in three models; the entry level, the XE V6 and the SE. The entry-level models had a four-cylinder engine, a manual transmission, and two-wheel drive. The XE V6 and SE models had a 3.3-Liter V6 engine and either a manual or an automatic transmission. The XE and SE models were available with either two-wheel or four-wheel drive. All models came equipped with anti-lock brakes, air conditioning, and skid plates for the engine/transmission. In 2001, the SE model came equipped with 16-inch tires, and the new stereo system included a CD player that could store five CDs and was located in the dashboard. In addition, the stereo system buttons were located on the steering wheel. In 2002, a supercharged V6 engine became available with the four-wheel drive vehicles. In 2003, an anti-skid system became optional for the vehicles that had an automatic transmission. The four-wheel drive models came equipped with traction control and a monitor to check pressure in the tires.

The second generation Nissan Xterra was launched in 2005 as a vehicle that seated five. The vehicle came with a V6 engine with 265 horsepower. The Xterra was available in three models; the S, the Off-Road, and the SE. The S and the Off-Road models came equipped with a six speed manual transmission, while the SE version came equipped with a five speed automatic transmission. Close competitors to the Xterra include the Honda Element and the Mazda Tribute in size and features. All versions were equipped with anti-lock disc brakes, airbags on the side in the front and shock absorbers manufactured by Bilstein. A system to avoid the vehicle from skidding was optional on the S version, but was part of the equipment offered on the Off-Road and SE versions. The SE versions were equipped with 17 inch tires and the other versions were equipped with 16 inch tires. In 2006, an entry-level model was added to the lineup.