Under the hood, both trim levels of the 2008 Matrix are the same. They come equipped with a 126 horsepower, 1.8 liter DOHC 4-cylinder engine that provides 122 pounds/feet of torque at 4200 rpm. The standard transmission for either version of the car is a five-speed manual, but both are available with an optional four-speed automatic as well. (The manual gets better fuel efficiency, of course.). Neither trim level comes with either anti-lock brakes or any kind of stability or traction control as a standard feature, but all those systems are available as upgrades across the line. There is no option for four-wheel drive on either trim.

Cosmetically, the 2008 Toyota Matrix XR is a bit nicer than the base model, but most of the differences are in subtle details. For example, on the XR the door handles, rocker panels, and side mirrors are colored to match the body of the car, while on the base model they are black, and the XR also has an option for body-colored underbody spoilers in the front and back. Likewise, both trims come with 16-inch steel wheels, with an available upgrade to alloy, but only the XR has an option for 17-inch alloy wheels. For that matter the powered moon roof is only available on the XR as well.

Inside the Toyota Matrix, both trims come with four-way adjustable front seats (driver and passenger) and a front passenger seat that folds flat, for ease in transporting long objects. The back seat is a fairly standard 60/40 split bench. Both models come with an array of gauges, including monitoring systems for the airbags and tire pressure, but power door locks are optional, and only the XR has an option for power windows.

Safety features on the 2008 Toyota Matrix include an engine immobilizer and front airbags for both the driver and front passenger, but side impact bags of any kind are available only as optional upgrades on both models.