Motor racing around Estoril dates to the 1930s, when a 2.8 km street circuit in the area hosted local events in 1937. The current permanent circuit was built in 1972 and featured a 4.349 km layout with two hairpin turns, significant elevation changes, and a 0.986 km start-finish straight with a maximum gradient approaching 7 percent. Its first seasons were filled with national events and occasional Formula 2 rounds, but the circuit fell into disrepair after the owning company was nationalized between 1975 and 1978. A substantial redevelopment effort was required before international motorsport returned in 1984.
Estoril became the home of the Formula One Portuguese Grand Prix from 1984 through 1996. The circuit quickly established itself as a memorable venue, generating several landmark moments in Formula One history.
In 1984, Niki Lauda clinched his third and final world championship by finishing second behind his McLaren teammate Alain Prost, winning the title by half a point — the narrowest margin in the championship's history. The following year, Ayrton Senna took his first Formula One victory at Estoril, one of the most celebrated debuts in the sport.
In 1989, Nigel Mansell received a controversial black flag during the Portuguese Grand Prix and subsequently made contact with Senna as he came in to serve a penalty, inflaming an already intense rivalry. The 1992 race saw Riccardo Patrese launched airborne in a near-backward flip after colliding with Gerhard Berger on the main straight. In 1996, Jacques Villeneuve executed a famous overtake on Michael Schumacher around the outside of the final corner while battling for the world championship.
After the death of Ayrton Senna at Imola in 1994, a chicane was added to Estoril, increasing its length to 4.360 km. Estoril was dropped from the Formula One calendar after 1996.
Following its exit from the Formula One calendar, Estoril continued to host top-level single-seater, sports car, and touring car racing. The FIA GT Championship raced there from 2000 to 2003, and the Deutsche Tourenwagen Masters visited in 2004. The World Series by Renault also used the circuit.
A redesign of the parabolica turn in 2000, reducing the circuit length to its current 4.182 km, was carried out to obtain FIM homologation. The circuit hosted the Portuguese motorcycle Grand Prix from 2000 to 2012, and the Superbike World Championship has appeared multiple times over the years.
During the COVID-19 pandemic, Estoril returned to prominence: the 2020 Superbike World Championship concluded at the venue, and the 2019–20 FIM Endurance World Championship finale was held there as well.
The Rally de Portugal incorporated a special stage at the Estoril circuit during the 1980s. The A1 Grand Prix series visited in 2005, with France winning both races. The Superleague Formula series raced at Estoril in 2008 and 2009.
Estoril today hosts rounds of the Superbike World Championship, Supersport World Championship, and the Yamaha R3 bLU cRU FIM World Cup each October. Winter testing series and endurance events are run through the year. The circuit continues to be managed by Parpública, the Portuguese state holding company.