All Subarus come with all-wheel drive and Subaru makes one of the best all-wheel-drive systems on the market. Subaru races the Impreza in the World Rally Championship, a challenging form of racing that takes place on narrow, winding roads covered with dirt, gravel, snow, ice and wet and dry pavement. It's the ultimate test of performance and durability. Subaru won at least four World Rally Championships in 1998, including the Acropolis, a race over rough, rocky roads in Greece.

Subaru applies what it has learned from rallying to the design and engineering of its cars. The Impreza Outback Sport (and the Impreza 2.5 RS) shows this in its suspension design. This rally heritage is also reflected in styling cues that make you feel like a world-class rally driver when blasting down backcountry roads.

Subaru's all-wheel-drive system applies power to the whichever tires offer the best grip. Though more expensive, all-wheel drive offers better performance than traction control, which typically limits power to reduce wheelspin. Subaru's system also provides better fuel economy than the part-time four-wheel-drive systems found on many sport-utilities.

It's important not to confuse the Impreza Outback Sport with the larger Legacy Outback. The Outback Sport is smaller, sportier and appeals to a younger crowd.

Based on Subaru's Impreza, the Outback Sport is distinguished by its rugged appearance that includes larger wheels and tires for added ground clearance, a hood scoop, body side molding, and integrated lower front bumper and spoiler. New for 1999 is a cross-hatch grille similar to the one seen on the Legacy Outback. Redesigned halogen headlamps are designed to offer better performance on dark and stormy nights-the type of conditions where Subarus excel.

As an all-wheel-drive subcompact, the Outback Sport is unique to the market. It's a more sure-footed alternative to sporty compact cars. It offers serious dirt road capability with far better handling and acceleration performance than mini sport-utilities.

Two-tone paint with new color choices this year, white-lettered, 15-inch all-season radial tires, splash guards, protective lower body cladding, a rear bumper cover and a raised suspension enhance the Outback Sport's rugged looks. Fog lamps ($245) and alloy wheels ($550) are optional.

Big windows afford excellent visibility. An integrated roof rack is ready for a kayak or mountain bike. The rear door opens upward to reveal up to 62 cubic feet of storage when the rear seats are folded flat. In short, the Outback Sport is ready to haul whatever you need deep into the woods.

Designed to get away from it all, the rear cargo area features a 12-volt power outlet, rear cargo hooks, a cargo cover and heavy-duty storage tray. The new headlights shut down automatically when the ignition is turned off to prevent battery drain. Remote keyless entry, one of those addictive features we wonder how we ever did without, is a worthwhile $225 option.

Standard safety features include airbags, side-impact door beams, collapsible steering column, four-channel ABS, front and rear three-point manual seatbelts and child safety locks on the rear doors. Our test model came with optional cruise control ($357), and a CD player ($420).

Under normal conditions, the power from Subaru's horizontally opposed boxer engine is directed to all four wheels. But when traction is lost, power is sent to the wheels with the most available traction. This system reduces the chance of getting stuck, but it also dramatically improves handling by distributing traction to the appropriate tires. It's easy to drive in bad conditions and offers excellent handling in good conditions.

Subaru's 2.2-liter flat four-cylinder engine spins out 142 horsepower at 5600 rpm, a slight increase over last year owed to an upgraded fuel-injection system. The revised fuel-injection system improves driveability at low engine speeds, making the Outback Sport more enjoyable around town. It also reduces emissions.

The Outback Sport accelerates quickly off the line yet has plenty of power throughout the range, which makes passing a breeze. A redesigned, electronically controlled four-speed automatic is available for $800. But we prefer the sporty fully synchronized five-speed manual gearbox, which provides better performance and fuel economy; it has been upgraded this year for smoother shifting performance.

Much of the Outback Sport's handling performance comes from lessons Subaru learned on the rally circuit. A combination of soft springs, stiff shocks, and long suspension travel keep all four wheels planted on the ground when driving quickly around bumpy corners, a huge benefit on paved and dirt roads. This long-stroke, four-wheel independent MacPherson strut suspension, along with Subaru's boxer engine and grapefruit-size center differential increase ground clearance without raising the car up in the air. The center of gravity remains low for excellent cornering performance, while the ground clearance is beneficial in snow and on unpaved logging trails.

We found the Outback Sport highly capable in all types of on-road driving conditions. On dirt roads, it handles extremely well and is a lot of fun to drive. It does a great job getting to favorite trout streams, but it's no Jeep Wrangler for extreme off-roading. Tackling the Rubicon Trail is not a good idea without skid plates and a low-range set of gears. But the Outback Sport runs away from off-road vehicles on twisty dirt roads, just like in the Crocodile Dundee commercials. The power-assisted rack-and-pinion steering is precise in corners, while power-assisted four-channel anti-lock brakes do a good job of slowing things down with minimal drama.

It is truly a sports car for the Outback and pricing, for the most part, has remained at 1998 levels.