The compact and lightweight Toshiba PDR-M81 is equipped with a 4.2 million-pixel CCD sensor that captures still images in JPEG format up to 2400 x 1600 pixels in size. It features a newly redesigned Canon 2.8x optical F2.9 zoom lens with a 2.2X digital zoom. The lens has a macro mode for photographing subjects as close as two inches away.

The PDR-M81's automatic settings take the guesswork out of digital photography and allow new users to experience the fun and satisfaction of being a digital photographer just minutes after taking the camera out of the box. In addition to the convenience of automatic operation, the PDR-M81 comes equipped with manual features too. Selectable white balance setting, full manual exposure control of shutter speed and aperture. There is also aperture priority and shutter speed priority AE modes, burst shot mode and selectable ISO settings. The built-in flash system has five modes to choose from including slow-sync for artistic photography involving moving or low light subjects.

The PDR-M81 has an AVI movie mode that lets users film up to three minutes of video at 160 x 120 resolution (15 fps), or 60 seconds at 320 x 240 (15 fps). Sound can be recorded during the video filming by using the camera's built-in microphone. When the video is finished it can be viewed on a computer monitor, a television (NTSC/PAL), or on the camera's 1.5-inch polysilicon color LCD.