As the replacement for the popular 850 T-5R and 850 R, the V70 R was unveiled in May 1997. Similar to the previous generation R models it featured a unique leather/Alcantara interior with diamond stitching on the seats. Further styling touches were a special front bumper, blue gauge faces for the instrument cluster, two special colours and special alloy wheels.
Intended to be the high-performance version of the model range, all R models were fitted with the highest performance engines of the line up, and were available in both front-wheel and all-wheel drive with either an automatic or manual transmission. A redesigned suspension with lower ride height and firmer shocks was standard.