Cosworth was founded by Mike Costin and Keith Duckworth, both former employees of Lotus Engineering. The company name is a portmanteau of the two founders' surnames. When Duckworth left Lotus to establish Cosworth in 1958, Costin remained at Lotus under the terms of a contract with Colin Chapman, continuing to work on Cosworth projects in his private time until 1962. Initial revenues came almost exclusively from Lotus: the company's first series production engines — the Mk.II, Mk.V, Mk.VIII, and Mk.XIV — were sold exclusively to Lotus, and many other early racing engines were delivered to Team Lotus.
The success of the Formula Junior engines — the Mk.III, IV, XI, and XVII — brought in revenues beyond Lotus. The establishment of Formula B by the Sports Car Club of America secured Cosworth's financial footing through domination of that class with the Mk.XIII engine, which allowed the company to concentrate fully on racing engine development rather than road car assembly.
The SCA, introduced in 1963, was Cosworth's first engine with a totally Cosworth-designed cylinder head. The subsequent four-valve FVA, introduced in 1966, was developed under a contract with Ford after Chapman helped Cosworth convince the company to purchase the design rights and sign a development agreement that included an eight-cylinder version. That eight-cylinder became the DFV.
The DFV — Double Four Valve — debuted at the 1967 Dutch Grand Prix, winning on its first outing in the hands of Jim Clark driving a Lotus 49. From 1968 it was available for purchase by any Formula One team, and during the 1970s almost the entire grid used one — with Ferrari, BRM, and Alfa Romeo the notable exceptions. The engine's appeal went beyond straightforward power: at 410 bhp at 9,000 rpm it did not always outpower rival twelve-cylinder engines, but it was lighter, and Colin Chapman fully exploited Cosworth's design choice to make the engine a structural component of the car itself, with load-bearing arms stressed through the block.
The DFV won a record 155 World Championship races, the last in Formula One being the 1983 Detroit Grand Prix powered by a Tyrrell driven by Michele Alboreto. Including its derivatives and successors, the total won 167 races across more than two decades.
A turbocharged Formula One era version was never developed beyond the short-lived GBA V6 in 1986. Instead, Cosworth developed the DFZ for the 1987 3,500 cc normally aspirated rules, followed by the DFR, which remained in Formula One with smaller teams until 1991. The company supplied its last premier-class Formula One engines to the Marussia F1 Team in 2013.
In 1975, Cosworth developed the DFX for IndyCar racing by destroking the DFV to 2,650 cc and adding a turbocharger. The DFX ended the Offenhauser's long reign as the standard IndyCar engine and maintained that dominance until the late 1980s.
In endurance racing, the DFV won the 24 Hours of Le Mans twice in its original 3.0-litre form — for Mirage in 1975 and for Rondeau in 1980. The DFL, a derivative developed for Group C racing from 1982, achieved five class wins at Le Mans in the C2 category during the latter half of the 1980s.
Cosworth's YB series of engines, based on a 1,993 cc Ford T88 inline four-cylinder block, entered production with the road-going Ford Sierra RS Cosworth in 1986. With 5,000 units built for Group A homologation, racing versions produced approximately 370 hp. A limited-edition evolution model — the Sierra RS500 — introduced in mid-1987 incorporated a larger turbocharger, with power eventually reaching close to 550 hp in full racing trim.
The RS500 dominated touring car racing from 1987 to 1992, winning the World Touring Car Championship in 1987, the Australian Touring Car Championship in 1988 and 1989, and numerous other national titles and major endurance races including the Bathurst 1000 in both 1988 and 1989.
The YB engine's association with Ford rally cars continued through the Ford Escort RS Cosworth, which carried forward the architecture into the Group A rally era of the early 1990s.
Duckworth sold his stake to United Engineering Industries in 1980, retaining his life presidency and technical involvement. UEI was subsequently acquired by Carlton Communications in 1988, and Cosworth was sold to Vickers plc in 1990. In September 1998 Vickers sold Cosworth to Audi, which divided the company: the engineering and manufacturing division became Cosworth Technology, while the race engine division, Cosworth Racing, and the electronics division, Pi Research, were sold to Ford. Ford in turn sold Cosworth Racing in November 2004 to Champ Car owners Gerald Forsythe and Kevin Kalkhoven, creating the Cosworth Group.
Since 2006, Cosworth has diversified into engineering consultancy, high-performance electronics, and component manufacture for clients beyond its classic motorsport base.
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