The short answer
Explorer wins on towing (5,600 lbs vs Highlander ~5,000 lbs), V6 EcoBoost performance (ST 400 hp), wider trim variety (Active to King Ranch to ST), and BlueCruise hands-free. Highlander wins on standard hybrid availability (most Highlander trims now hybrid), Toyota reliability reputation, and a slightly more efficient powertrain. Both seat 7 (8 with bench in some trims). Pick by hybrid priority vs trim variety + tow.
Engines
Explorer: 2.3L EcoBoost (300 hp), 3.0L V6 EcoBoost (400 hp ST). Highlander: 2.4L turbo I-4 (265 hp), 2.5L Hybrid (243 hp combined, 36 mpg combined). Highlander Hybrid is the fuel-economy play. Explorer ST is the performance play. Different priorities.
Towing
Explorer: up to 5,600 lbs (with tow package). Highlander: up to 5,000 lbs. Explorer edges Highlander on max tow. Most family use is well under either limit.
Third-row usability
Explorer third row is genuinely usable for adults on shorter trips. Highlander third row is best for kids — adults will struggle on long trips. If real third-row adult use matters, Explorer has the edge.
Cargo
Explorer cargo behind row 3: ~18 cu ft. Highlander cargo behind row 3: ~16 cu ft. Behind row 2: Explorer ~47 cu ft, Highlander ~48 cu ft. Comparable. Both usable for family duty.
Tech and interior
Explorer 13.2-inch portrait SYNC 4 screen on Platinum / King Ranch. BlueCruise hands-free hardware available. Highlander uses Toyota Audio Multimedia with 12.3-inch screen on top trims. Both modern. BlueCruise is meaningfully better than Toyota's hands-on system on highway driving.
Reliability and resale
Toyota wins reliability narrative — Highlander Hybrid has a strong record. Explorer reliability has improved over recent generations but does not match Toyota's reputation. Resale: Highlander historically slightly stronger; Explorer competitive.
Price
Explorer starts low $40s (Active). Highlander starts mid $40s (LE). Loaded: Explorer Platinum mid-$60s, Explorer ST mid-$60s. Highlander Platinum / Hybrid Platinum mid-$60s. Comparable price ladders.
How to decide
Pick Explorer for: more tow capacity, ST 400 hp performance variant, BlueCruise hands-free, wider trim variety, more usable third row. Pick Highlander for: standard hybrid availability + mpg, Toyota reliability reputation, slightly easier daily driver. Eugenio at Sunrise Ford handles the Explorer side.