In 1988, a more aerodynamic-looking Lancer was launched, following the shape of the Galant. A five-door hatchback was added to the range. The Mirage and Lancer nomenclature continued. The station wagon continued on the old platform and shape, as did, in some markets, a five-door version of the Mirage. In Australia, all models were sold as the Mitsubishi Lancer, initially designated as the CA series and from 1990 as the CB. By that time, the Lancer name was shared with the Dodge Lancer sold in North America. The sedan was sold as the Mirage Aspire in Japan.

In some markets a ‘van’ model was produced, being the three-door hatchback without rear side windows (attracting a reduced sales tax in the Dutch market).

In the Philippines, the fourth generation lancer is also known as “Lancer singkit”. “Singkit” is a Tagalog word that describes the typical almond-shape that the epicanthic fold gives the eyes of East Asians. It is a reference to the shape of the headlamps and turn signals which taper at the sides. The headlamps of the previous generation were rectangular in comparison.

In 1982, a new model was launched called the Lancer Fiore also known as third version, based on the Mitsubishi Mirage. The Fiore was often sold as a Lancer in international markets, but also the Mirage Sedan and, with the five-door hatchback model, remained in production for a good part of the 1980s. In Australia, it would eventually be sold as the Mitsubishi Colt Sedan although cosmetically different. Thus, Mitsubishi had two similarly sized models competing in the same market segment.

The following year, both Mirage and Lancer lines were renewed from the third generation. The Mirage four-door and Lancer sedan became the same car. Fuel injected and turbocharged models were an integral part of this range. A station wagon was added in 1985, and it spawned a raised, four wheel drive version. Often, the Mirage (or Colt) would be the name used on the three-door hatchback, and the Lancer name used on the remainder.

This model formed the basis of the original Proton sedan, the Saga, which was still in production until early 2008. However, in the Philippines, this generation of Lancer was not sold through Mitsubishi dealers.