The Castle Combe airfield opened in May 1941 on land belonging to the Castle Combe estate and operated as RAF Castle Combe for seven years as a pilot training ground during the Second World War. From 1946 to 1948 its buildings served as a resettlement camp for Polish ex-service personnel. When the property was returned to the Gorst family in 1948, they partnered with the Bristol Motorcycle & Light Car Club to organise the circuit's first race, held in July 1950.
By 1955 the property had been divided and sold. Between 1956 and 1961 the circuit was used exclusively for motorcycle racing before being converted back to four-wheeled motor racing in subsequent years.
For much of its history Castle Combe was notable for its high average speeds. In 1997, Nigel Greensall set a lap record of 130.93 mph (210.71 km/h) driving a Tyrrell 022. That same year proved to be a turning point: a fatal spectator accident prompted the owners to install two new chicanes to reduce speeds. The revised layout, completed over the winter of 1998–1999, measured 1.850 miles (2.977 km) — slightly longer than the original configuration.
As of April 2024, the unofficial overall lap record belongs to Max Chilton, who lapped the circuit in 0:54.559 seconds in a McMurtry Speirling PURE VP1 during a private test session.
Castle Combe has hosted numerous motorsport disciplines across its history. Formula Three returned to the circuit in 2001, though the series was eventually excluded after 2005 when a noise nuisance order was issued — both the British Formula Three Championship and the British GT Championship exceeded permitted noise levels and could not return.
The circuit runs its own home-championship with classes for saloon cars, sports cars, GTs, and Formula Ford. National racing clubs including the 750 Motor Club and the British Racing and Sports Car Club (BRSCC) incorporate Castle Combe into their championship calendars. An annual motorcycle racing weekend includes sidecar championships, historic races, and modern supersport rounds.
Since 2001, the circuit has hosted Rallyday, an annual demonstration event for rally cars. Television programmes Top Gear and Fifth Gear have also used the venue to race and test vehicles.
The Under 17 Car Club has used the track since 1976, hosting events where members as young as 11 can learn to drive. The club reconfigures the track with roundabouts and motorway sections and holds an annual fundraising Magic Day for the Teenage Cancer Trust. Castle Combe also hosts a Greenpower event as part of a multi-venue series promoting electric vehicle education.
When not in use for motorsport, the circuit grounds are home to one of the largest regular car boot sales in the South West of England, as well as an annual steam rally held each May.
The circuit sits immediately south of the upper part of Castle Combe village, itself a historic Cotswolds settlement that has been described as one of the prettiest villages in England. The wartime control tower, which was retained after the airfield's conversion to racing use, remains in service on race days.