Some 1.51 million vehicles are being recalled for the steering defect in Japan and 1.25 million vehicles abroad, including 670 000 in the US.
Affected models include the Prius hybrid and Corolla produced from 2000 to 2011 in Japan, and from 2000 to 2009 in other markets.
No accidents have been reported, Toyota said.
Reputation in trouble
According to the automaker, 620 000 vehicles, spanning five hybrid models, have a defective water pump in addition to a steering shaft defect.
The latest recalls affecting the Prius follow a 7.43-million vehicle recall due to a faulty power-window switch in October 2012.
Toyota has been trying to repair its reputation after a series of massive recalls totalling 14-million vehicles over several years.
Before its recalls, Toyota had boasted a reputation for pristine quality, centered around its production methods and quality control. Toyota executives have acknowledged the escalating recalls were partly caused by the automaker's overly ambitious growth goals.