The first numeric characters specify the engine block's generation
The next one or two letters specify the engine family
The suffix (separated by a dash) specifies the features of the engine:
Suffix Feature
A Valvematic variable lift intake head
B Twin SU-style side-draft carburetors
C Carburated / California Emissions Controlled
D Twin Downdraft carburetors
E Electronic Fuel injection
F Economy narrow-angle valve DOHC
G Performance wide-angle valve DOHC
H High compression like 9.8:1 (example: 5E-FHE)
High pressure charged (example: 2L-THE)
I Single-point fuel injection
J Autochoke (Early models) or unknown pollution control
L Transverse
M Philippines' market (meaning unknown)
N CNG fuel
P LPG fuel
R Low Compression (For 87 and below octane fuel)
S Swirl intake (1980s)
SE Direct injection (1990s)
T Turbocharged
U With Catalytic converter Japan-spec emissions
V Common Rail Diesel Injection (D-4D)
X Atkinson cycle (typically also indicates a Hybrid engine, as Toyota only uses the Atkinson cycle with hybrids)
Z Supercharged
For Example
4A-GE
4 - 4th Generation Engine In The A Engine Family
A - The Engine Family it is in
G - Wide-angle dual camshaft
E - Electronically Fuel Injected
source....
http://en.wikipedia.org/wiki/Toyota_engine.
MOD EDIT: Repost