The Xterra was originally introduced in North America in the 2000 model year and was marketed as a simple, but capable SUV with the slogan Everything you need, nothing you don't. Although accepted by a wide range of ages, incomes, lifestyles and genders, Nissan marketed the Xterra primarily to the adventurous and outdoor consumer. Many commercials feature one driving the vehicle through mud, unloading mountain bikes out of the back, or packing up surfing equipment. Two design cues have remained constant through the vehicle's life, its raised rear roofline and the 'Hump' on the back lift gate. The raised roof allows for stadium seating and the hump allowed the inclusion of a first aid kit in the liftgate. The Xterra was not sold in Europe or Japan, where the smaller X-Trail and now Qashqai are Nissan's entries in the compact SUV segment. In the United States, the Xterra was Nissan's entry-level SUV until the arrival of the 2008 Nissan Rogue. In the Nissan lineup, the Xterra is priced between the Rogue and the Murano, but sized below the Rogue.
During its first two years, there were three Xterra models. The two base models were designated XE, though those letters did not appear on the exterior name plate. The Xterra was mounted on a truck frame, as contrasted with the unibody Pathfinder.
The lowest-price model came with the 4 cylinder KA24DE motor similar to the ones found in the Nissan Altima and 240SX, manual transmission only, steel wheels, and lacked accessories such as the step rails and a roof rack.
The most popular XE Xterras were configured with several option packages, combining the 3.3L V6 with other features such as the roof rack, side step-rails, and carpeted floormats. The XE proved to be the most popular of the trim levels, with more flexibility on equipment options. A fully loaded XE had almost all the practical features of the top-of-the-line SE model, while costing an average of $2,000 less.
The SE was the premium trim level for the Xterra. Everything which was an option on the XE came standard on the SE. Nissan, to set apart a fully-optioned XE and the SE added a flip-up sunroof and special badging to the back of the truck ("Xterra SE" rather than just "Xterra"). Other SE-only options included the fuzzy upholstery, and 6-CD changer.