The circuit's location deep within the sherry-producing region of Spain was a deliberate choice to attract both Spanish and international motorsport fans, though its remoteness ultimately proved a persistent obstacle to large Formula One crowds. Despite a theoretical capacity of 125,000 spectators, attendances at F1 events were modest, contributing to the circuit's eventual exit from the Formula One calendar.
Jerez hosted its first international motorcycle event in early 1986, followed shortly by the Formula One Spanish Grand Prix in April of that same year. The circuit remained on the F1 calendar through the 1990 Spanish Grand Prix, after which Formula One relocated to the Circuit de Catalunya in Barcelona.
The circuit returned to Formula One prominence in 1994 when it hosted the European Grand Prix. That race is remembered in part because a new chicane — the Senna Curve — was inserted at the corner where McLaren driver Martin Donnelly had suffered a career-ending accident during qualifying for the 1990 Spanish Grand Prix.
Jerez hosted the 1997 European Grand Prix, the race that decided the Formula One World Championship between Michael Schumacher and Jacques Villeneuve. The two collided during the race; Schumacher was excluded from the championship result, and Villeneuve went on to claim the title. The podium celebrations were disrupted when the Mayor of Jerez, Pedro Pacheco, intervened during the trophy presentation in a manner that angered the governing body. Formula One has not returned to Jerez for a Grand Prix since that 1997 incident.
In 1992, the circuit was modified to eliminate four corners, creating the long sweeping right-hander known as the Curva Sito Pons. The Senna Curve chicane was added ahead of the 1994 European Grand Prix. The track was resurfaced in 2005.
In 2013, the circuit's final corner was renamed in honor of Jorge Lorenzo, the Spanish rider who had won four world championships. On 3 May 2018, the circuit itself was renamed in tribute to Ángel Nieto, the legendary Spanish motorcycle racer who died in 2017, becoming the Circuito de Jerez – Ángel Nieto. On 3 May 2019, the sixth corner was renamed after Dani Pedrosa following his retirement from MotoGP racing.
Jerez established itself as a prime winter testing venue for both Formula One and motorcycle racing. Its Andalusian climate, with mild winters and dry conditions, made it attractive for teams seeking representative temperature conditions even in January and February. Formula One teams used Jerez regularly until 2015. MotoGP teams and the Superbike World Championship have continued to use the circuit for pre-season testing.
The circuit has been a fixture of the MotoGP calendar, hosting the Spanish motorcycle Grand Prix each spring. It also hosted the Andalusian motorcycle Grand Prix in 2020, a replacement race added during the COVID-19 pandemic when the calendar was restructured. The circuit regularly stages the Red Bull MotoGP Rookies Cup and junior motorcycle series rounds.
The circuit has witnessed several tragic accidents. Nobuyuki Wakai, a 25-year-old Japanese motorcycle racer, died following a crash on 1 May 1993. Marcos Garrido, aged 14, died at the circuit in March 2019. Ismael Bonilla, aged 41, was killed in a crash on 5 July 2020. Dean Berta Viñales, a 15-year-old Spanish rider, died following a crash during a Superbike World Championship event on 25 September 2021.
The all-time outright lap record at Jerez is 1:15.651, set by Pedro de la Rosa driving a McLaren MP4-20 during Formula One testing in April 2005.