The concept for AVUS emerged in 1907 when the Kaiserlicher Automobilclub (KAC) envisioned a fee-financed venue combining motorsport competition with an industry testing road. Construction money and official permissions proved difficult to secure; a development company was formed in 1909 but groundwork did not begin until spring 1913. World War I halted progress, and though Russian Army prisoners were briefly employed on the project, the road remained unfinished until businessman and politician Hugo Stinnes provided the funding to complete it from 1920. The circuit was inaugurated on 24 September 1921 during the first post-war International Automobile Exhibition (IAA) with a motor race, after which the road opened to the public at a charge of ten Marks.
The original AVUS layout stretched 19.569 km (12.160 mi), each straight running approximately half that distance, connected by flat large-radius curves and driven counter-clockwise. Motorcycle racing began there from 1922. The first international German Grand Prix for sports cars was held on 11 July 1926; that event was marred by death when Adolf Rosenberger lost control in rain and killed two track marshals and injured a third fatally, while a mechanic had been killed in practice two days earlier. Rudolf Caracciola won the race, launching his reputation. The German Grand Prix subsequently moved to the new Nürburgring in 1927, and AVUS was used for rocket car experiments — Fritz von Opel recording 238 km/h (148 mph) in an Opel RAK2 in 1928.
Annual racing resumed in 1931, with Caracciola winning again, and Manfred von Brauchitsch taking victory in 1932. The 1932 race saw Prince George Christian of Lobkowicz die when his Bugatti Type 54 crashed at the southern hairpin. The Nazi government, which had declared German victories a matter of national pride, backed the development of the Mercedes-Benz and Auto Union Silver Arrows. After Luigi Fagioli won in a Mercedes-Benz W25 in 1935, the 1936 race was cancelled to allow the north curve to be rebuilt as a steeply banked brick turn at 43 degrees — earning the nickname "wall of death" for its complete absence of a retaining barrier. The Silver Arrows raced on the banked circuit only once, in 1937, when Luigi Fagioli's Auto Union Type C set a qualifying average of 284.31 km/h (176.66 mph), the fastest motor racing lap recorded at that time. Hermann Lang's winning average race speed of approximately 276 km/h (171 mph) remained the fastest road race average for nearly five decades. No further major race was held after 1937, as Bernd Rosemeyer's death during a land speed attempt on a separate Autobahn in early 1938 rendered the high-speed AVUS untenable for Grand Prix cars.
Racing resumed at AVUS on 1 July 1951 for Formula Two and Formula Three cars, with East German driver Paul Greifzu winning. A new southern hairpin was introduced roughly midway along the straights, reducing circuit length to 8.300 km (5.157 mi). A non-championship Formula One race was held on 19 September 1954, largely a demonstration by Mercedes-Benz W196 drivers Karl Kling and Juan Manuel Fangio. AVUS's one and only World Championship Formula One race took place on 2 August 1959 — the German Grand Prix, won by Tony Brooks. That weekend was also marked by the death of French driver Jean Behra in a supporting sports car race when his Porsche RSK went over the top of the unprotected north turn banking and he was flung into a flagpole. The banking was dismantled in 1967 to make way for an expanded road intersection under the Funkturm tower.
Racing continued into the 1990s with national events including DTM and Formula Three, but the track was progressively shortened — eventually to 2.639 km (1.640 mi) — and chicanes were added to control entry speeds into the North Curve. A multi-car pileup cancelled a race in 1995, and British driver Keith O'dor was killed in a Super Touring Car event that September. Environmental and traffic concerns after German reunification brought the racing era to a close; the final events were held in 1998, followed by a veterans farewell in 1999.
The distinctive round race control tower at the northern end of AVUS remains standing, still bearing its historic Mercedes-Benz and Bosch signage, and the old wooden grandstand is protected as a heritage monument. The EuroSpeedway Lausitz in Brandenburg has served as the principal replacement venue for competition in the region since 2000.