W. O. Bentley and his brother Horace had previously imported French DFP cars in Cricklewood. W. O.'s wartime observation that aluminium could replace cast iron for piston manufacture led to the first Bentley aluminium pistons being fitted to Sopwith Camel aero-engines. He formally registered Bentley Motors on 18 January 1919 — the day the Paris Peace Conference opened. The founding team included draughtsmen Harry Varley from Vauxhall and Frederick Burgess from Humber, whose task was to translate W. O.'s ideas into engineering drawings. The first engine's overhead camshaft was designed by ex-Royal Flying Corps officer Clive Gallop.
The first car was promised for June 1920 but the development schedule extended to September 1921. Bentley first competed internationally at the 1922 Indianapolis 500, where Douglas Hawkes drove a modified road car to 13th place, averaging 74.95 mph for the full 500 miles from 19th on the grid. The team then rushed back to England to enter the 1922 RAC Tourist Trophy on the Isle of Man.
The company's competitive identity was forged by the Bentley Boys, a group of wealthy British enthusiasts who drove and financed racing campaigns. Woolf Barnato, heir to South African diamond and gold fortune, rescued the business in May 1926 with an initial investment exceeding £100,000 through his Baromans Ltd vehicle; he paid off all creditors for £75,000, devalued existing shares to one shilling each, became chairman, and injected further capital totalling another £100,000 through to 1929. Other key members included Sir Henry "Tim" Birkin, S. C. H. "Sammy" Davis, Glen Kidston, Dudley Benjafield, and Frank Clement.
Le Mans results during the Bentley Boys era:
1923: 4th (private entry, 3-Litre)
1924: 1st (3-Litre, works entry)
1927: 1st, 15th, 17th (3-Litre)
1928: 1st (4½-Litre, Barnato and Rubin)
1929: 1st (Speed Six), 2nd, 3rd, 4th (4½-Litre)
1930: 1st, 2nd (Speed Six)
Bugatti, the principal rival, reportedly referred to the Bentleys as "the world's fastest lorries." The company withdrew from racing after 1930, stating it had "learned enough about speed and reliability."
The Blower Bentley — a supercharged 4½-Litre developed by Birkin against W. O. Bentley's explicit opposition — produced five racing specials but the overstressed engines proved chronically unreliable. None ever won a race. Birkin did finish second in the 1930 French Grand Prix at Pau in a stripped racing Blower, behind Philippe Etancelin's Bugatti Type 35.
The Wall Street Crash and Great Depression eliminated demand for expensive Bentleys. In July 1931 two mortgage payments fell due that neither the company nor Barnato could meet and a receiver was appointed. Napier expected to complete its purchase in November 1931, but British Central Equitable Trust — a front for Rolls-Royce — submitted a winning sealed bid of £125,000. Neither Bentley himself nor Napier knew who the real buyer was until the deal concluded. Barnato received £42,000 for his shares.
Rolls-Royce formed Bentley Motors (1931) Ltd, acquired the Cork Street showrooms, the Cricklewood complex, and the services of W. O. Bentley (though the latter was disputed by Napier in court). Production halted for two years before resuming at Derby, where the Bentley 3½ Litre appeared in 1933 as a sporting variant of the Rolls-Royce 20/25. W. O. Bentley left to join Lagonda in April 1935. All Bentleys produced from 1931 to 2004 used Rolls-Royce-derived chassis and engines.
In 1938 a wartime shadow factory was constructed at Crewe on 60 acres of potato farmland. It produced 25,000 Rolls-Royce Merlin aero-engines and employed 10,000 workers at its 1943 peak. After the war, car production transferred from Derby to Crewe. The all-steel Mark VI entered production in early 1946 — the first Bentley with a complete factory body — and was followed by the R Type and the limited-volume R Type Continental fastback, predominantly bodied by H. J. Mulliner.
A financial crisis rooted in the Rolls-Royce RB211 aero-engine programme forced Rolls-Royce into receivership in 1970. The car division emerged as Rolls-Royce Motors Limited and was sold to Vickers plc in August 1980. Bentley's share of combined output had sunk below 5 percent. Vickers invested in reviving the performance image through the 1980 Mulsanne and subsequently the turbocharged Turbo R. The strategy succeeded: by 1986 the Bentley-to-Rolls-Royce ratio had risen to 40:60; by 1991 parity was reached.
In October 1997 Vickers announced the sale of Rolls-Royce Motors. BMW, already an engine and component supplier, bid £340 million; Volkswagen outbid at £430 million, acquiring designs, model nameplates, production facilities, and the Spirit of Ecstasy and grille shape trademarks. The Rolls-Royce name and logo, owned by Rolls-Royce Holdings plc, were separately licensed to BMW for £40 million; BMW subsequently established Rolls-Royce Motor Cars at Goodwood, West Sussex. Volkswagen modernised the Crewe plant significantly, launching the Continental GT and Flying Spur. The Bentayga SUV extended the range further. China became Bentley's largest single market by November 2012.
Bentley returned to the Le Mans podium in 2001 and won outright in 2003. In GT3 competition, the Continental GT3 developed with M-Sport won the Silverstone round of the 2014 Blancpain Endurance Series, Bentley's first official British race entry since the 1930 RAC Tourist Trophy.