Sainz grew up in Madrid. At age 11 he had his first driving experience in his sister Carmen's SEAT 600. As a teenager he received a trial from Real Madrid football club and was Spanish squash champion at 16. He also competed briefly in Formula Ford while still playing squash, and studied law up to the second cycle before committing fully to motorsport. His rallying began in 1980; in 1981 he won the inaugural Copa Panda one-make rally series launched by SEAT for young drivers. He won the Spanish Rally Championship in 1987 and 1988 with a Ford Sierra RS Cosworth, having finished runner-up in 1986 in a Group B Renault 5 Turbo.
Ford gave Sainz his first WRC appearances in 1987. He finished seventh at the Tour de Corse and eighth on the RAC Rally. In 1988 Luis Moya became his co-driver, beginning a partnership that lasted fifteen years. That season he scored two fifth places. At the end of 1988 he left Ford for Toyota Team Europe.
In 1989 with the Toyota Celica GT-Four ST165 he showed four retirements before landing three consecutive podiums. In the 1990 season Sainz won the Acropolis Rally, Rally New Zealand, the 1000 Lakes Rally in Finland — as the first non-Nordic driver — and the RAC Rally, claiming his first WRC title ahead of Didier Auriol and Juha Kankkunen.
In 1991 the fight with Kankkunen in a resurgent Lancia was settled on the final round, the RAC Rally, where Kankkunen won by a single point in one of the closest championships in WRC history; both drivers had taken five wins. In 1992, aboard the new ST185 Celica, Sainz won the Safari Rally and Rally Catalunya. He claimed his second title at the RAC Rally after a three-way battle with Kankkunen and Auriol — winning the season finale to clinch the championship. Toyota produced a limited-edition Celica GT-Four ST185 bearing Sainz's name following his second title.
Sainz left Toyota at the end of 1992 because Toyota's new Castrol sponsorship conflicted with his personal Repsol sponsorship. He moved to the private Jolly Club Lancia outfit, but the Delta was ageing and he finished eighth in the championship. At Subaru (1994–1995) his development work on the Impreza helped the team win the 1995 manufacturers' title; Sainz narrowly lost the drivers' title to teammate Colin McRae at the final event. Returning to Ford for 1996–1997, he won the inaugural Rally Indonesia and the 1997 Acropolis Rally, also winning the Race of Champions in 1997. Back at Toyota (1998–1999), he won the 1998 Monte Carlo Rally but lost the title 300 metres from the finish of the season-ending Rally Great Britain with a mechanical failure. Toyota secured the 1999 manufacturers' title. At Ford again (2000–2002) he won the inaugural Cyprus Rally in 2000, and inherited a victory at the 2002 Rally Argentina following the disqualification of two Peugeots.
Sainz moved with McRae to Citroën for 2003, winning in Turkey — the first gravel win for the Citroën Xsara WRC. He scored his final WRC victory at the 2004 Rally Argentina. His last WRC start was the 2005 Acropolis Rally. Co-drivers across the WRC years included Antonio Boto, Luis Moya, Marc Martí, and Lucas Cruz. His WRC career contributed to manufacturers' championships for Subaru (1995), Toyota (1999), and Citroën (2003, 2004, 2005).
Sainz began rally-raid competition with Volkswagen from 2006. He won the FIA Cross-Country Rally World Cup in 2007 and the Silk Way Rally in 2009. His Dakar Rally wins: 2010 with Volkswagen, 2018 with Peugeot, 2020 with Mini (X-raid), 2024 with Audi. The 2024 victory made him the oldest Dakar winner at age 61. He co-drove with Lucas Cruz for the Dakar campaigns.
In 2021 and 2022 Sainz founded and competed for the Acciona Sainz XE Team in the Extreme E electric off-road series, partnering Laia Sanz.
Sainz has three children, including Formula One driver Carlos Sainz Jr. His brother Antonio Sainz also competed in rallying. He received the Princess of Asturias Sports Award in 2020.
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