Image Credit: You_SuiKoyoAZ / X.Toyota's sports car revival may soon bring back one of its most famous nameplates, as the long-rumored MR2 successor is being developed for a potential 2028 arrival, complete with a mid-mounted turbocharged engine and possibly all-wheel drive.The project has hardly been a secret. Toyota Gazoo Racing has been publicly developing its mid-engine architecture using the unusual GR Yaris M concept, while more recently a heavily disguised sports car prototype has reportedly been testing at the Toyota-owned Fuji Speedway.According to Autocar, the production car could also arrive during a major transformation for Gazoo Racing. Toyota is turning GR into a more distinct performance brand, with the upcoming GR GT serving as one of the first vehicles to ditch Toyota badging entirely.AdvertisementAdvertisementThat means the reborn MR2 could potentially be sold primarily as a GR product rather than a conventional Toyota. The automaker has already trademarked the GR MR2 name, although neither the production name nor a 2028 launch has been officially confirmed.A New Turbo Four Could Make 400 HP Or Moreミュージアムのカフェにいたらなんかきた…!!な に こ れ pic.twitter.com/T9TMktQEnz— ∬なのぽよ∬🧪🗿 💬🔁💙 𝙉𝙚𝙭𝙩→? (@You_SuiKoyoAZ) July 22, 2026At the center of the project is Toyota's new G20E 2.0-liter turbocharged four-cylinder engine. Developed with performance applications in mind, the compact engine is expected to produce somewhere around 400 to 450 horsepower in road-going form.Toyota has designed the G20E to be physically compact, helping engineers package it low in the chassis while keeping the vehicle itself relatively small. Racing versions could reportedly produce upwards of 600 hp, although there is currently no indication that a production MR2 would receive that extreme output.The engine is also compatible with hybrid and plug-in hybrid configurations. It's unclear whether Toyota intends to electrify the MR2 or stick with a purely combustion-powered setup like the current GR Yaris M development car.AWD Could Change The Traditional MR2 Formula走行動画 pic.twitter.com/5LxZVE7FCC— ∬なのぽよ∬🧪🗿 💬🔁💙 𝙉𝙚𝙭𝙩→? (@You_SuiKoyoAZ) July 22, 2026The biggest departure from previous MR2 generations could be the drivetrain. Toyota's development mule combines its mid-mounted engine with all-wheel drive, rather than sending power exclusively to the rear wheels.AdvertisementAdvertisementGR president Tomoya Takahashi explained that moving the engine behind the driver reduces the demands placed on the front tires compared with a powerful front-engine performance car. Adding AWD could further improve stability by using power at the front axle to help pull the car through corners.That would represent a major philosophical change for the MR2, a name traditionally associated with a mid-engine, rear-wheel-drive layout. Toyota's experimental system can reportedly distribute power equally between both axles or send everything rearward, potentially giving engineers a way to combine AWD security with rear-drive handling characteristics. Whether that system reaches production hasn't been confirmed.The FT-Se Could Influence Its DesignImage Credit: Toyota.Toyota's heavily camouflaged prototype doesn't reveal much about how the finished sports car will look. Autocar reports that the 2023 FT-Se concept could provide a stronger indication of the production model's eventual styling.The FT-Se was originally presented as an electric sports car, yet its low nose, compact proportions, pronounced rear haunches, and cab-forward profile already resemble the basic shape expected from a mid-engine coupe. Toyota's compact new combustion engine could allow designers to retain much of that silhouette.AdvertisementAdvertisementA production MR2 would also enter an increasingly unusual part of the market. Affordable mid-engine sports cars have largely disappeared, while Toyota has continued investing in enthusiast vehicles under chairman Akio Toyoda's push to build more exciting cars.Toyota Is Building A Bigger GR FamilyThe MR2 isn't expected to arrive alone. Toyota is also working toward reviving the Celica, which could use the same G20E engine as part of the Gazoo Racing expansion.With the GR Supra and GR86 reaching the ends of their current production runs, Toyota needs new models if GR is going to become a substantial performance brand. A mid-engine MR2 packing roughly 400 hp would certainly give it a compelling centerpiece below the exotic GR GT.While plenty of details are unconfirmed, including AWD, hybrid assistance, pricing, and the final name, Toyota is openly racing and testing the hardware required to make a new mid-engine sports car happen, making an MR2 revival look considerably less hypothetical than it once did.AdvertisementAdvertisementIf you want more stories like this, follow Guessing Headlights on Yahoo so you don't miss what's coming next.