Giampaolo Dallara established the company in 1972 after working for Ferrari, Maserati, Lamborghini, and De Tomaso. He also co-founded the Autodromo Riccardo Paletti in Varano. The company's early work focused on sports car racing and hillclimbing in smaller engine classes. Dallara designed his first Formula Three car for Walter Wolf Racing in 1978, and the Dallara name appeared on its own F3 car from 1981 onward.
Dallara's ascent to dominance in Formula Three began in Italy, where it won every Italian Formula Three Championship title from 1985 onward with the sole exception of 1990. By the late 1980s the company had expanded into the German and French markets, claiming the German title in 1987 and the French title in 1987 and 1992.
The pivotal moment came in 1993 with the F393, which featured major aerodynamic revisions and a monodamper front suspension layout. It won every race in the Italian, French, and German championships that year, and in Britain competitors including champion Kelvin Burt switched from Reynard or Ralt chassis to Dallara to remain competitive. From that point Dallara became virtually synonymous with Formula Three, winning every major title in the category. The Macau Grand Prix has gone to Dallara entries consistently since 1993.
Dallara entered Formula One in 1988, building the chassis for BMS Scuderia Italia. The relationship lasted through 1992. The best results were a pair of third-place finishes: Andrea de Cesaris at the 1989 Canadian Grand Prix and JJ Lehto at the 1991 San Marino Grand Prix.
The company made sporadic returns to F1 thereafter. In 1999 it built the test chassis for Honda's aborted re-entry to the series. In 2010 it constructed the car for Hispania Racing's inaugural season, though the relationship soured over financial disputes and questions about the F110 chassis quality. Most significantly, from 2016 onward Dallara has designed and built every chassis for the Haas F1 Team, an arrangement confirmed in 2014 and continuing through the 2026 season.
Dallara entered IndyCar competition in 1997 as one of three original chassis constructors when the Indy Racing League launched its own formula. The first model, the IR-7, was immediately competitive: Jim Guthrie won Dallara's first Indy car race at Phoenix in March 1997, and Eddie Cheever won the Indianapolis 500 in 1998 in a Dallara-built IR-7.
The company became the exclusive IndyCar chassis supplier from 2007 onward. Successive generations followed: the IR-00 family (2000-2002), the IR-03/IR-05 family (2003-2011), and from 2012 the DW-12, named after the late driver Dan Wheldon, who had tested the car before his fatal accident at Las Vegas in October 2011. The DW-12 introduced a shared monocoque safety cell concept in which aero kits could be supplied by third parties; Chevrolet and Honda offered unique kits for 2015-2017 before a universal spec UAK18 kit returned. In 2013 Dallara reached its 200th Indy car victory at Barber Motorsports Park. The manufacturer has won seventeen of the twenty Indianapolis 500s it has contested.
Dallara opened an engineering and assembly center in Speedway, Indiana, near the Indianapolis Motor Speedway in 2012.
Dallara's reach extends across nearly every major feeder series that serves as a pathway to Formula One. It became the exclusive chassis supplier for the FIA Formula 2 Championship (formerly GP2) and FIA Formula 3 Championship (formerly GP3), giving it a near-monopoly on the primary routes into F1. It also supplies the Indy NXT series (formerly Indy Lights) — holding that contract since 2002 — and introduced the updated IL-15 for the 2015 season. The company designs the chassis for Japanese Super Formula under the SF14 and SF19 designations.
In 2007, Dallara created the Formulino concept car to bridge the gap between karting and Formula Three; the ADAC Formel Masters adopted it from 2008.
Dallara's involvement in prototype sports car racing dates to the early 1980s, when it constructed the Lancia LC1 Group 6 prototype and the LC2 Group C car in collaboration with Abarth. In 1993 it returned to endurance racing with the Ferrari 333 SP, built for IMSA GT Championship WSC regulations, which achieved numerous victories in North America and Europe.
Subsequent programmes included chassis work for the Toyota GT-One, multiple generations of the Audi R8 Le Mans Prototype — arguably the most dominant endurance racing chassis of its era — and the Chrysler LMP, which was later offered to privateer customers as the Dallara SP1. In 2015 Dallara was selected as one of four constructors for the LMP2 and DPi regulations that debuted in 2017, producing the P217. For the LMDh class the company supplies BMW (M Hybrid V8) and Cadillac (V-Series.R), and will produce the chassis for an unnamed McLaren prototype debuting in 2027. Dallara also manufactures the chassis for the Ferrari 499P, though that car falls outside the LMDh framework.
In 2017 Dallara unveiled its first road car, the Stradale, timed to coincide with Giampaolo Dallara's 81st birthday. The company provided engineering services to Renault, Alfa Romeo, Bugatti, Maserati, and Lamborghini across a range of road and motorsport projects.
A joint venture with KTM produced the KTM X-Bow, a lightweight two-seat sports car revealed at the 2008 Geneva Motor Show.
Dallara's trajectory from a small Italian chassis builder to the structural backbone of global single-seater racing is without parallel in motorsport manufacturing. Its simultaneous presence at the top of IndyCar, Formula 2, Formula 3, and Super Formula — alongside its role as the engineering partner of the Haas F1 Team — means that a Dallara chassis is effectively the standard instrument of professional open-wheel racing across multiple continents. The company also produces handbikes under the Z-Bike marque and contributed aerospace engineering work including a drill for the Philae lander aboard the Rosetta probe.