The 2016 Lexus IS small luxury sedan takes a big step toward full competitiveness this year, and it's all about what's under the hood. Previously, the entry-level model was the IS 250, a generally satisfying car let down by its outdated 2.5-liter V6 engine. For 2016, that model gives way to the new IS 200t, which boasts a turbocharged 2.0-liter four-cylinder engine capable of 241 horsepower and an EPA-rated 33 mpg highway. At last, the base IS can match the fuel-efficient turbo-4s found in its European rivals.

The new 2016 Lexus IS 200t is powered a turbocharged four-cylinder engine. It's the first time the IS has had anything but a six-cylinder.

Lexus is offering the new engine with rear-drive only for the time being, however, so if you want the more affordable version of an all-wheel-drive IS you'll be looking at the new IS 300. It comes standard with AWD and a 3.5-liter V6 good for 255 hp. It's not nearly as fuel-efficient as the IS 200t, however, checking in at 26 mpg highway. At the top of the food chain, the Edmunds "A" rated IS 350 continues on with its proven 306-hp V6 and either rear- or all-wheel drive.

Of course, there was already a lot to like about the current IS. The interior is a standout in terms of both design and quality, while the backseat merits special praise for its adult-friendly dimensions. On the road, it's not the sportiest car of its kind, but it strikes a nice balance between comfort and performance that should appeal to many shoppers. Particularly with the IS 200t on the scene, there's no reason why this Lexus shouldn't be considered alongside the best small luxury sedans.

Within that group, the BMW 3 Series continues to lead the charge, providing superb road manners and a range of excellent gasoline and diesel engines. Hot on its heels is the Mercedes-Benz C-Class, recently reinvented with S-Class styling and an impressive engine array of its own. You might also want to check out the Acura TLX, as it offers an enjoyable V6/all-wheel-drive combo and plenty of value. But more than ever, the 2016 Lexus IS deserves to be on your consideration list.

The 2016 Lexus IS is available in three models: IS 200t, IS 300 and IS 350. Equipment is largely the same from model to model, with a few exceptions noted below.

Standard equipment across the line includes 17-inch wheels (18-inchers on the IS 350), xenon headlights, LED running lights/foglights/taillights, heated exterior mirrors, a sunroof, keyless entry and ignition, dual-zone automatic climate control, a manual tilt-and-telescoping steering wheel, an auto-dimming rearview mirror, eight-way power front seats with driver power lumbar, "NuLuxe" premium vinyl upholstery, 60/40-split folding rear seatbacks, Bluetooth phone and audio connectivity, an 8-inch color display with a console-mounted control dial, voice command functionality, Siri Eyes Free and an eight-speaker sound system with a CD player, HD radio, satellite radio and dual USB ports.

Many desirable IS options are grouped into packages, though specific availability can vary depending on the region of the country in which you live. The Premium package includes LED headlights, heated and ventilated front seats and a rearview camera. The Premium Plus package tacks on automatic wipers, a power-adjustable steering wheel and a blind-spot monitor with rear cross-traffic alert. The Navigation package replaces the standard infotainment control dial with Lexus' Remote Touch mouse-type controller and adds a navigation system, the rearview camera, enhanced Bluetooth (with automatic phonebook download capability) and the smartphone-based Enform App Suite (integrating Bing, Yelp, Pandora and other handy Internet services). A 15-speaker Mark Levinson audio system can be added to the Navigation package.

The Luxury package includes the Premium and Premium Plus packages and adds auto-dimming exterior mirrors, front and rear parking sensors, leather upholstery with contrast stitching, wood trim, a heated steering wheel rim and driver memory functions.

Finally, the F Sport package -- optional on all three IS trim levels -- features a full-mesh treatment for the grille, a revised front bumper (which loses the foglights), LED headlights, staggered-width 18-inch wheels (with either summer or all-season tires), a sport-tuned suspension (with adaptive dampers on the IS 350 RWD), upgraded brake pads, an intake sound generator that amplifies engine noise during acceleration (not available on IS 200t), heated and ventilated front sport seats with enhanced bolstering, a black headliner, perforated leather trim and a special sport-oriented gauge cluster. Available exclusively on the IS 350 RWD F Sport is a variable-ratio steering system that includes the power tilt-and-telescoping steering wheel.

For sportier handling, pick the F Sport package. It is available on all three IS models.

Stand-alone options include a few of the above items as well as same-width 18-inch wheels (with either summer or all-season tires), a power rear sunshade, adaptive cruise control (bundled with a collision preparation system) and a lane-departure warning system with automatic headlights. Remote vehicle access via smartphone app is available through the Lexus Enform system.

The 2016 Lexus IS 200t features rear-wheel drive and a turbocharged 2.0-liter four-cylinder engine rated at 241 hp and 258 pound-feet of torque. The transmission is an eight-speed automatic. According to the EPA, the IS 200t should return 26 mpg combined (22 city/33 highway).

The IS 300 is motivated by a 3.5-liter V6 that makes 255 hp and 236 lb-ft. It comes only with all-wheel drive and a six-speed automatic transmission. The EPA projects 21 mpg combined (19/26).

Offered with either rear- or all-wheel drive, the IS 350 also has a 3.5-liter V6, but it generates a healthier 306 hp and 277 lb-ft of torque. An eight-speed automatic transmission is standard for rear-wheel-drive models, and a six-speed automatic is used for all-wheel-drive cars. EPA fuel economy estimates are 22 mpg combined (19/28) with RWD and 21 mpg combined (19/26) -- same as the IS 300 -- with AWD.

On Edmunds' diverse 120-mile evaluation loop, we recorded an impressive 26 mpg in an IS 350 RWD, well above the EPA combined estimate.

In Edmunds acceleration testing, a rear-wheel-drive IS 350 accelerated from zero to 60 mph in 5.9 seconds. That's technically a bit below average for a small luxury sedan with an upgraded engine, but few will walk away from the IS 350 thinking it needs more muscle.

The 2016 Lexus IS sedan's standard safety equipment includes antilock disc brakes with brake assist, traction and stability control, front seat side airbags, front knee airbags, side curtain airbags and rear-seat side airbags. Lexus Enform Safety Connect is also standard and incorporates automatic collision notification, a stolen-vehicle locator, an emergency assist button and roadside assistance.

Optional safety upgrades include a rearview camera, front and rear parking sensors, blind-spot monitoring with rear cross-traffic alert, and a lane-departure warning system with automatic headlights. The optional adaptive cruise control brings a collision preparation system that uses radar to monitor traffic conditions ahead; if a collision is deemed imminent, it automatically tightens the front seatbelts and increases initial braking power, though automatic panic braking is not included.

In Edmunds brake testing, an IS 350 with all-season tires required 123 feet to stop from 60 mph, an average showing for a luxury sedan. An IS 200t with summer tires improved to 117 feet, but that's still an unimpressive result for a car in this class with sticky summer rubber.

In government crash testing, the 2016 Lexus IS 350 received a top five-star rating overall, with four stars for frontal crash protection and five stars for side-impact protection. The independent Insurance Institute for Highway Safety gave the IS its highest rating of "Good" in the moderate-overlap frontal-offset and side-impact tests.

The 2016 Lexus IS delivers satisfying power no matter which model you select. The IS 200t shares its turbocharged four-cylinder with the NX 200t crossover, where we've been impressed with this engine's refined zest. The all-wheel-drive IS 300 is a bit behind the times with its six-speed automatic and relatively modest 255-hp V6, but in the real world, it's got plenty of punch. As for the IS 350, its 306-hp V6 has been with us for a decade now, but we still find it strong and satisfying, especially with the F Sport's intake sound generator at full song. The RWD version's slick eight-speed automatic transmission (also standard on the IS 200t) is notably smoother and more responsive than the AWD model's aging six-speed.

The IS sedan's precise, well-tuned steering is an unexpected pleasure that enhances driver confidence in all situations. Its upscale ride quality, however, is perhaps its best attribute, approaching the suppleness and refinement of the larger Lexus GS sedan. That largely holds true with the F Sport package, too, as long as you're talking about the IS 350 RWD with its standard adaptive dampers. Otherwise, the sport-tuned F Sport suspension can seem overly firm at times.

The 2016 IS has one of the nicer interiors in this class, highlighted by top-notch materials and unusual attention to detail. The dashboard, armrests, steering wheel and even the sides of the center console (where knees tend to rub) are swathed in dense, high-quality padding. The front seats are comfortable and supportive under most circumstances, though enthusiast drivers might prefer additional bolstering (even with the F Sport seats). In back, two adults can sit with ease thanks to nicely shaped outboard seats and a respectable amount of legroom.

We like the upscale materials used in the 2016 Lexus IS. Less impressive is the car's tricky-to-use infotainment controller.

The IS sedan's dashboard design is attractive and contemporary, and the rakish angle of the center stack enhances the general feeling of spaciousness. The optional F Sport digital instrument panel features a cool (if not particularly useful) motorized circular gauge that slides side to side, as well as a configurable display. The high-quality buttons and knobs are easy to use, as is the nifty touch-panel fingertip slider for temperature control. The only real foible here is the mouselike Remote Touch interface that comes with the navigation system. Cursor control is imprecise, particularly when you're on the move, and it doesn't help that there's no hard "back" button and the icons are all the same color. Fortunately, the voice controls work well for many infotainment functions.

Trunk capacity in the IS is an above-average 13.8 cubic feet, and the rear seatbacks fold down to open up additional space.