First, the original 227-horsepower WRX. Then, the 271-horse Mitsubishi Evolution. Now, Subaru ups the ante in the compact-sedan wars again--with the 300-horsepower WRX STi. Don't confuse it with the 2.0-liter/ 286-horse STi sold in Europe since 2002; the car received substantial remodeling on its way to our shores and will be sold here as an '04 model.

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All Imprezas get a facial from the front doors forward. The more handsome and aggressive look comes courtesy of Peter Stevens, who (among other things) designed the McLaren Formula One supercar. The new front fascia shuttles air to the brakes, and the massive basket-handle rear wing provides effective downforce. In order to deliver the torque levels American buyers demand, the STi's flat-four (now designated E525) goes from 2.0 to 2.5 liters and gets variable valve timing plus drive-by-wire throttle. A larger-than-WRX-spec air scoop and intercooler help the IHI turbo feed the engine up to 14.5 pounds of boost. A driver-activated sprayer system shoots two-second spurts of water onto the intercooler to reduce charge-air temps. Just as important as the 300-horsepower rating is an equal torque output that peaks at 4000 revs. Those who drive the freeways will appreciate the standard six-speed manual trans; no automatic will be offered.

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One of the STi's trickest bits is its Driver Controlled Center Differential. In automatic mode, it maintains a 35/65-percent front/rear power split. The driver can also select a manual mode, which, via a thumbwheel on the console, offers six levels of center differential locking (up to 50/50). There are limited-slip diffs front and rear.

The cabin is essentially standard Impreza fare, augmented with grippy-yet-comfortable sport seats, cool aluma-look trim, a meaty leather-wrapped Subaru World Rally Team steering wheel, and revised instrumentation that puts the tach front and center. It's curious, however, that there's no audio system. Subaru says this weight-saving move is in keeping with the car's rally-inspired persona.

The STi goes well beyond the WRX's already sporty suspension tuning. Additional crossmembers front and rear increase chassis rigidity. The wheels are forged 17-inch BBS units, and the Bridgestone Potenza RE070s were designed specifically for this model. Brembo provides the brakes, front and rear. Dampers, bushings, and anti-roll bars are all uprated. Suffice it to say that the STi is considerably more than a WRX with a few bolt-ons and a bigger motor.

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One look at the numbers demonstrates that it outperforms its capable, though less-costly, little brother on every front. The first thing you'll feel is the ultra-wide powerband, courtesy of both larger cubes and variable valve timing. The close-ratio six-speed means you can keep the engine on boil without having to flog it, and it's smooth right to its 7000-rpm redline. Steering is light, reasonably quick, and has adequate, if not race-carlike, feel. It understeers sooner than we'd hoped, but grips like Spiderman--anything over 69 mph through our slalom test is way impressive. The brakes are solid, easy to modulate, and highly resistant to fade.

Comparisons to the Mitsubishi Evolution are inevitable, and we're happy to make them, with these caveats: Although we tested both with the same driver and timing gear, we believe the surface on which we ran the Evo to be slightly grippier. This won't affect acceleration (these are AWD cars, so little wheelslip is involved), but would give the Mitsubishi a handling and braking advantage. Also, our STi was a barely broken-in, preproduction model. So, while these numbers are highly representative--and amazingly close--they're not 100 percent like-kind. A pure apples-to-apples comparo is in the works.

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Overall, the Evo suspension is tuned more aggressively: It turns in sharper and rolls less. The STi is obviously a handler, but more supple, more tossable, and easier to live with on nasty road surfaces. The Subaru is better for high-speed work--less nibbling at uneven road surfaces--and the sixth gear makes cruising much more relaxed. We expected the STi's power advantage would prove it quicker, but the Evo's more aggressive gearing and manic boost levels served up slightly better acceleration numbers. Braking is about a wash.

A tenth here, an mph there. We suspect that WRX fans will lust after the STi, whatever the Evo can and can't do. And vice versa. As Editor Smith said last month: Welcome to the '03 version of Chevy versus Ford--Japanese style.