The first generation Pathfinder was unveiled in May 1985 and was later introduced in July 1986 as a two-door body-on-frame SUV, for the 1987 model year in the United States. It shared styling and most components with the Nissan Hardbody Truck. Built on a ladder-type frame, the Pathfinder was Nissan's response to the Chevrolet Blazer, Ford Bronco II, Jeep Cherokee, and non-American SUVs like the Toyota 4Runner, Honda Passport, and the Isuzu MU.

Before the Pathfinder there was the Nissan Bushmaster (an aftermarket conversion of the Datsun Truck). Its optional 4WD system that could be engaged electronically while the vehicle was moving was unique at the time. All YD21 Pathfinders were available in both 2WD and manually engaged 4WD configurations, with base models installed with a 2.4 L four-cylinder engine. In certain countries, this generation also came with a 2.7-liter I4 diesel engine known as the TD27 with the option of a turbocharger installed later in November 1988.