The Dodge Caliber is the replacement for the Neon, starting in spring 2006 with the 2007 model year. The Caliber concept model is a hatchback, roughly the size of a Neon, and was first shown at the 2005 Geneva Motor Show. It features styling elements derivative of larger DaimlerChrysler vehicles, such as a crosshair grille and large wheel arches. The production Caliber will be one of the first modern Dodge-branded vehicles for sale in the European market. It debuted publicly on January 10, 2006 at the North American International Auto Show.

The Caliber will use a continuously variable transmission (dubbed CVT2 by Dodge) sourced from JATCO TransTechnology (a Nissan subsidiary), the first DaimlerChrysler car to employ this technology. It will use a four-cylinder 1.8–2.4 L GEMA gasoline engine and a 2.0 L Volkswagen-designed diesel engine.
 
Dodge Caliber show car reveled at SEMA 2005 on November 1, 2005 by Mopar.The car will also feature an electronically-controlled all wheel drive system with variable torque between speeds of 25 and 65 mph for optimal handling.

The Caliber rides on the GS platform, co-designed with Mitsubishi Motors. It shares the platform with the Mitsubishi Lancer, but is most similar to the Jeep Compass and Jeep Patriot.

The base SE model features front wheel drive and a 1.8 L 148 hp (110 kW) GEMA I4 attached to a 5-speed manual transmission. The SXT has more features, while both can also get a 2.0 L 158 hp (118 kW) version of the engine as an option. The R/T model uses the 172 hp (128 kW) 2.4 L version. The CVT2 transmission is optional on all versions and standard on the R/T.

The Caliber will be built at the Belvidere Assembly plant, where its predecessor was produced.

The SRT-4 model, introduced at the Chicago Auto Show in February of 2006, features a turbocharged version of the 2.4 L engine with a class-leading 300 hp (224 kW). This is routed to the front wheels with a six-speed manual transmission. The SRT-4 uses the large 13.3 in (338 mm) front vented disc brakes with dual-piston calipers and 11.8 in (300 mm) rear single-piston disc brakes from the Chrysler 300C. The suspension is lowered as well.

Dodge claims a 5.9 second sprint to 60 mph (97 km/h) with quarter-mile (0.4 km) acceleration in less than 14 seconds. They also promise 28 mpg (8.4 L/100 km) on the highway. The SRT-4 will be available in the spring of 2007.