TOYOTA has developed the iQ with a 1.3L engine for the Scion brand in USA. Due to the importance of fun-to-drive factor for the Scion brand image, a responsive driving performance is required even with compact packaging and a small engine. In addition, because of the recent attention to global-warming and energy issues on a global scale, development of vehicles with high fuel economy is one of the most important issues for a car manufacturer. Therefore, it is necessary for a vehicle to have both high driving performance and fuel economy. TOYOTA has adopted the CVT-i as the transmission for this purpose.The following were achieved by adopting the CVT-i as the transmission for the iQ(1.3L). 1Responsive driving performance with shift changes without a time lag.2Compact transmission for efficient vehicle packaging3Class-leading fuel economy performance.Moreover, it was developed with adjustments for the US market by improving the shift schedule for a linear acceleration feel. This paper describes the main structural elements of the transmission and the control system technology for fuel economy and driving performance.