The first-generation Kia Sephia is the first car that was actually designed by Kia with their own chassis. Engines available were the B-series engines, with the 1.5-liter rated at 59 kilowatts (79 hp), the 1.6-liter 78-kilowatt (105 hp), and the 1.8-liter BP engine at 91-kilowatt (122 hp) from 1994. The car was presented in September 1992 to replace the aging Capital, which was rapidly losing market share. The Sephia proved quite successful, selling over 100,000 in its first full year in the home market (1993). A total of 472,920 Sephias were sold over the life of the original Sephia. In the United States, sales began in late 1993 for the 1994 model year. This was the first Kia to be exported to the US. An update came in the 1995 model year when grilles and taillights were restyled and all US-market Sephias except California-market RS/LS models got upgraded to the new 1.8-liter DOHC four-cylinder BP engine as used in the Mazda Familia (BG). Kia licensed the engine design from Mazda, but manufactured it themselves.

It was launched in Europe in the spring of 1994 as the Kia Sephia in some markets and in others, including the United Kingdom, as the Kia Mentor. It was similar in size to best-selling European small family cars like the Ford Escort, but was priced similarly to smaller cars like the Ford Fiesta. Its key rivals in Europe were budget-priced Eastern European and Far Eastern imported products including the Daewoo Nexia, Hyundai Accent, Proton Persona and Skoda Felicia. In Brazil, the car went on the market in March 1994. It was only offered with the 1.5-liter twin cam engine with 112 PS (82 kW) and was considered a competitor to the domestically built Chevrolet Omega and Volkswagen Santana. To make a car suitable for the Brazilian market, Kia went through the trouble of studying Brazilian road surfacing and importing 1,000 litres (260 US gal) of Brazilian gasoline to properly program the engine management. Kia presented a conceptual convertible version of the first generation Sephia, which was named "Kia Sephia Cabrio" at some auto shows.