In 2000, Toyota began development of the second generation Tacoma under chief engineer Chikuo Kubota. Majority of development work was handled by Hino in Japan. Designers Shigeya Hattori and Hideo Karikomi of Hino, won the internal design competition in 2001. Final designs were frozen for production in 2002 and patents filed on July 3, 2003, with test mules being tested from early 2003. Prototypes were built later in 2003, with development ending in the second quarter of 2004.
On February 4, 2004 at the Chicago Auto Show, Toyota unveiled a bigger and more powerful Tacoma. This new Tacoma was available in eighteen different configurations, that included three cab configurations, four transmissions, two engines, and two bed lengths. The three cab configurations consist of regular cab, access cab, and double cab. The transmissions come in 4-speed automatic, 5-speed automatic, 5-speed manual, and 6-speed manual. Beds are: 6 ft (1.8 m) long bed, and 5 ft (1.5 m) short bed. The Tacoma's 4.0-liter 1GR-FE V6 took the place of the original 3.4-liter 5VZ-FE V6. The new V6 had many enhancements, such as a tow rating of 6,500 lb (2,948 kg), and a payload capacity of 1,650 lb (748 kg). It produces 236 horsepower (176 kW) and 266 lb·ft (361 N·m) of torque. The smaller, but all-new 2.7-liter 2TR-FE 4-cylinder alternative in less expensive models is rated at 159 hp (119 kW) and 180 lb·ft (244 N·m). of torque.
Toyota also introduced an X-Runner trim, which replaces the slow selling S-Runner trim from the previous generation. The X-Runner features the 1GR-FE paired to a six-speed manual transmission, 18 in (457 mm) alloy wheels, lowered two inches from the factory and included an X-Brace suspension package. Toyota also included a Down-Hill Assist Control (DAC) and Hill-Start Assist Control (HAC), with models that were equipped with the optional Toyota Racing Development (TRD) Off-Road package. DAC automatically applies braking during downhill descents while HAC prevents the vehicle from rolling backwards on hills. A rear locking differential, or limited-slip differential were also some optional features. Every Tacoma was manufactured with a composite inner bed that includes a deck rail system with four tie down cleats, hook-pins, storage boxes. TRD package equipped Tacomas also feature an in-bed 115V/400W AC power outlet. The tie down cleats are rated to hold up to 220 lb (100 kg).
The 2006 model Tacoma was a bit different from the 2005 model. The 2006 model made some options standard. Toyota also added 2 new interior colors for the 2007 model year. 2008 models are carry-ons from 2007. For 2009 safety features were added and the Tacoma no longer offers a mechanical limited slip differential rather an open differential which uses individual wheel braking to simulate a mechanical LSD or "Auto-LSD". TRD off-road models continue to come equipped with a locking rear differential. The second generation Tacomas were assembled in Tijuana, Mexico and Fremont, California while the plastic/composite beds were all built in Mexico. However, in August 2009 Toyota announced that it would relocate Tacoma production from Fremont to San Antonio, Texas.
A minor facelift came for 2009, including a slightly revised grille on some models, new LED taillamps, and on the X-Runner, TRD Offroad and TRD Sport models includes smoked headlamp trim. Auxiliary audio input now comes standard. The Access/Double Cab trucks have two new ceiling mounted speakers and available backup monitor. Four new exterior colors are also added to the Tacoma.
The 2012 model year refresh featured a restyled front bumper, headlights, grille, hood, new interior and a shark fin antenna for the SiriusXM satellite radio. The 2013 model year comes with touch screen audio system and removes the shark fin antenna and SiriusXM radio capability unless the optional Entune package is installed. 2014 models came with a new SR trim and for 2015 models the regular cab model was discontinue
There were a total of three engines available for the Toyota Tacoma:
Two-wheel drive Tacomas had 5-stud wheel lug patterns. The 2.4 L and 3.4 L engines were available in this vehicle depending on options. Automatic and manual transmissions were available.
Four-wheel drive Tacomas (also 2WD crew cabs 2000–present) had six-stud wheel lug patterns, which had been used on the prior pickups (pre-Tacoma trucks). The truck's frame is fully boxed until immediately after the front leaf spring mount bracket where it transitions into a c-frame section. The 3.4 V6's manual transmission was an R150F while the automatic transmission was an A340F (Aisin code is 30-40LE).