In December 1991 for the 1992 model year, Isuzu completely redesigned the Trooper to keep pace with changes in the SUV marketplace, making it larger, more powerful, and more luxurious. Originally only the long wheelbase, five-door model was on offer, but in March 1992 the shorter three-door model was added. These 4,155 lb (1,885 kg) vehicles used a 3.2 L 177 PS (130 kW; 175 hp) (SOHC) petrol engine or 3.2-liter dual overhead cam (DOHC) version rated at 193 PS (142 kW; 190 hp). A SOHC 3.2-liter engine producing 193 PS (142 kW; 190 hp) was introduced in 1996, replacing the earlier DOHC engine in selected export markets. Most models still used a part-time four-wheel-drive system, which required stopping the vehicle to engage and disengage the front axle. Starting in the 1996 model year, some Troopers came with a "shift-on-the-fly" engagement system.

The UBS series was also available with a pushrod overhead valve (OHV) 3.1-liter inline-four engine intercooled turbo diesel (designated "4JG2") producing 114 PS (84 kW; 112 hp) at 3,600 rpm, and 260 N⋅m (192 lb⋅ft) at 2,000 rpm. Japanese-market diesels have a claimed maximum power of 125 PS (92 kW; 123 hp) and 275 N⋅m (203 lb⋅ft) of torque at the same engine speeds. It was offered as a more rugged and fuel-efficient option for towing and heavy-duty operation, relative to the standard 3.2-liter petrol. The diesel-powered Jackaroo was available with a five-speed manual transmission and manual front hubs only coupled to a part-time four-wheel drive system with open front and limited slip rear differentials. The 3.2-liter V6 petrol engine version was also available with an optional four-speed automatic transmission with automatic locking front hubs. The same diesel engine was also available in the UK and other markets with a belt-driven overhead camshaft, which developed slightly more power. After 1998, and the introduction of the "4JX1" 3.0-liter diesel engine, a four-speed automatic transmission was made available in addition to the five-speed manual transmission.