It was powered by the naturally-aspirated, crankcase reed-valve inducted, liquid-cooled 249cc parallel-twintwo-stroke engine from the first generation TZR250 (this same engine also powered the R1-Z). This motor featured the 'YPVS' Yamaha Power Valve System, CDI ignition and digital spark advance. Almost all of the engine, gearbox, and electrical components are interchangeable with the TZR and R1-Z.
The TDR was designed to provide agile handling and quick acceleration both on and off the road, and power delivery was modified to suit its intended use . The special upswept expansion chambers, unique to the TDR, part of this; as well as aiding ground clearance. The bike was originally released in a 250cc format, but a 240cc derivative was also produced exclusively for the French market.