The six-speed gearbox replaces the old five-speed gearbox and the new 1.6-litre diesel has been redesigned to offer better performance and lower CO2 emissions.
Peugeot claims half of the parts in the new engine have been completely redesigned and although the diesel particulate filter remains, new technology and software in the engine delivers 112bhp compared to the 110bhp from its predecessor.
It is only a minor increase, but the newer engine delivers 270Nm of torque at 1,750 rpm, an improvement of 12.5 per cent.
CO2 emissions have been reduced too, and the updated models will qualify for free first year VED from April 2010.
Along with the soon-to-be-released Peugeot iOn, the Peugeot 207 will help the manufacturer lower CO2 emissions to reach strict EU emissions targets.
Peugeot 207 Sport models have received dark tinted and electric rear windows in five-door hatchback and SW versions as part of the upgrade.