The THL1 was designed around the Ford TEC V6 that Cosworth's Keith Duckworth was developing for Carl Haas's new team. When Duckworth lost approximately four months pursuing a turbocharged four-cylinder approach before switching to the V6 layout, the engine was delayed until the following season. This forced Haas to negotiate with Hart Racing Engines for the use of their 415T, a turbocharged straight-four producing around 750 bhp that had originally been developed for Formula Two and was regarded as underpowered compared to the leading turbo units of 1985.
The car's rear end was redesigned to accept the straight-four engine rather than the originally planned V6. Ross Brawn served as lead aerodynamicist, conducting the bulk of the wind tunnel testing. The car carried the Lola name on the entry forms because of Carl Haas's long commercial association with Lola Cars International through his role as US importer, though Lola founder Eric Broadley had no design or engineering involvement in the THL1 beyond an advisory title.
The THL1 made its Formula One debut at the Italian Grand Prix at Monza with 1980 World Champion Alan Jones as the sole driver. Jones qualified 25th out of 26 cars, 9.859 seconds behind pole-sitter Ayrton Senna in a Lotus-Renault, and retired after six laps with an overheating engine. The team missed the Belgian Grand Prix because it had not been on the original entry list when that race was rescheduled from an earlier date.
At the European Grand Prix at Brands Hatch, Jones qualified 22nd and retired after 13 laps with radiator damage. The South African Grand Prix saw Jones qualify 18th but withdraw before the race, officially through illness, though Jones later revealed the absence had been arranged to avoid the political controversy of racing under apartheid-era conditions following pressure on Beatrice Foods from civil rights activists in the United States.
The season concluded at the inaugural Australian Grand Prix in Adelaide, where Jones stalled on the grid and fell to last place. He recovered to run sixth before retiring on lap 20 with electrical problems, a performance that demonstrated the car's genuine potential despite its limited power output.
The THL1 was pressed back into service for the first three races of 1986 while the THL2 was completed. Frenchman Patrick Tambay joined Jones as a second driver. Tambay qualified 13th at the Brazilian Grand Prix in his first race for the team and achieved 11th at the San Marino Grand Prix — twelve places ahead of Jones who was driving the new THL2 for the first time. This comparison highlighted just how much more the THL1 had been developed over the winter relative to the new car's initial setup.
Neither Jones nor Tambay scored a championship point with the THL1.
The THL1 was the last car to use the turbocharged Hart 415T engine in Formula One. Alan Jones himself described the Hart unit as akin to sending a boy to do a man's job, characterising it as an old Formula Two engine to which a turbocharger had been fitted. Despite its underpowered state, the car showed sufficient handling quality to attract confidence that the team's prospects would improve once the Ford V6 was delivered.