The third generation Honda CR-V

The third generation CR-V is powered by the latest version of Honda's standard K-series 2.4 L 4-cylinder engine, similar variants of which can also be found in the current-generation Honda Accord and Honda Element. In North American markets, this engine's power is rated at 166 hp @ 5,800 rpm and 161 ft·lb @ 4,200 rpm. A 2.2 L i-CTDI diesel is offered in the European and Asian markets. The European market Honda CR-V offers a new R20A 2.0 L engine, based on the Honda R-series i-VTEC SOHC engine found in the Honda Civic, as opposed to the previous CR-V offering the K20A. The manual transmission has been dropped from the US market, leaving the five speed automatic as the sole unit.

The 2007 CR-V features a rear liftgate, unlike previous models. There is no longer a spare wheel attached to the back door. The new CR-V is lower, wider, and shorter than the previous models; the length decrease stems mostly from the fact that the spare wheel no longer adds length to the back of the vehicle. A lowering of the center of gravity is another benefit of the spare wheel being located underneath the rear floor. A feature unique amongst SUVs is the center rear seat pass-through.

Honda is also offering an integrated Navigation option on the EX-L model. The navigation unit is made for Honda by Alpine and includes voice activated control, XM radio, in dash CD player that can play MP3's and WMA's. It also has a 6 Disc CD changer in the center console and a PC Card (PCMCIA) slot in the Nav unit for flash memory MP3 or WMA files. A second CD player is behind the navigation screen, this CD player plays MP3/WMA cds. A rear backup camera is also included.

The 1999 European, Australian, and Asian model CR-Vs featured more drastic changes. Exterior alterations included a new front bumper, smoothed off rear bumper, and a smaller plastic radio antenna on the rear of the roof. "Nighthawk Black" was added to the list of paint choices, while the unpopular "Passion Orange" disappeared. A new, deeper blue pearl and red pearl replaced their old metallic and enamel equivalents. European models received an enlarged Honda emblem on the front grille, and a new metallic yellow paint in certain countries.

An iPod adapter was to be an available option on US models, but is currently only available as an add-on accessory. Even so, all CR-V models still have the auxiliary audio input jack, which is either on the head unit itself (LX) or on central tray (EX) or inside the center console (all versions of the EX-L, with or without navigation).

In the United States, the Honda CR-V became the number-one selling SUV in the US for 2007, a title previously held for fifteen years (1991–2006) by the Ford Explorer. To meet the high demand, Honda shifted some Civic production from East Liberty, Ohio to Alliston Plant #2 (where some Pilot, Ridgeline, and Odyssey production was located until production was consolidated at Honda's Lincoln, Alabama facility) to free up space for additional CR-V production.