The original Airtrek name was chosen to "describe the vehicle’s ability to transport its passengers on adventure-packed journeys in a 'free-as-a-bird' manner", and was "coined from Air and Trek to express the idea of footloose, adventure-filled motoring pleasure." The Outlander nameplate which replaced it evoked a "feeling of journeying to distant, unexplored lands in search of adventure."
The second generation of the vehicle was introduced in 2005 and all markets including Japan adopted the Outlander name. It was built on the company's GS platform, and used various engines developed by Mitsubishi, Volkswagen and PSA Peugeot Citroën. PSA's Citroën C-Crosser and Peugeot 4007, which are manufactured by Mitsubishi in Japan, are badge engineered versions of the Outlander.
The Airtrek was first introduced to the Japanese market on June 20, 2001, priced from ¥1.7–2.3million. It offered a choice of either a 126PS (93kW) 4G63 2.0L or a 139PS (102kW) 4G64 2.4L GDI, mated to a standard INVECS-II 4-speed semi-automatic transmission. Both front- and four-wheel drive were available. The four-wheel drive version uses normal ("open") differentials for the front and rear axles, with a viscous coupling unit for the center differential. A high performance model, using a detuned version of the Mitsubishi Lancer Evolution's 4G63T 2.0L turbo, was introduced in 2002. The engine produced 240PS (180kW) and 343N·m (253lb·ft), although in export markets the Outlander version's output was reduced to 202PS (149kW) and 303N·m (223lb·ft).
The Outlander arrived in 2003, with a modified front grille and headlights which increased the overall length by approximately 130millimetres (5.1in), and the two models were manufactured in parallel thereafter. A version of the 4G64 powerplant was offered first, while a 4G69 2.4L SOHC MIVEC I4 producing 158PS (116kW) and 220N·m (160lb·ft), and the turbocharged 4G63T appeared in 2004. All had the option of front- or four-wheel drive.
In several South American markets it was known as the Montero Outlander, to benefit from an association with the strong-selling Mitsubishi Montero Sport.