The 166 family emerged from Ferrari's first competition car, the 125 S, sharing its Aurelio Lampredi-designed tube frame and double wishbone front and live axle rear suspension, with a 2,420 mm wheelbase. The key change was the engine: the 1.5-litre Gioacchino Colombo V12 was enlarged to 2.0 litres (1,995 cc), achieved through increases in both bore and stroke to 60 mm by 58.8 mm respectively. In base 166 S trim the unit produced between 110 PS and 130 PS depending on carburetor specification, with a top speed of 170–215 km/h. For the MM variant, power rose to 140 PS at 6,600 rpm and top speed to approximately 220 km/h.
The majority of 166 MM bodies were built by Carrozzeria Touring in barchetta (open boat) form — a light, low, open two-seat body style that became closely associated with early Ferrari identity. Motor Trend Classic later named the 166 MM Barchetta sixth in their list of the ten greatest Ferraris of all time.
The 166 family achieved a sweep of the three most prestigious road races of the era within a single calendar year, a feat unmatched in motorsport history.
In 1948, the 166 S won the Targa Florio with Clemente Biondetti and Igor Troubetzkoy, and the Mille Miglia with Biondetti co-driven by Giuseppe Navone.
The 1949 season brought the 166 MM's defining chapter. At the Mille Miglia, Ferrari Barchettas finished first and second: Biondetti and Salani in the top position, followed by Bonetto and Carpani. A few weeks later at the 24 Hours of Le Mans, Luigi Chinetti and Lord Selsdon drove a 166 MM to overall victory — Ferrari's first Le Mans win. Biondetti also took the 1949 Targa Florio in a 166 SC. A further 166 won the 1949 Spa 24 Hours. The combination of the Targa Florio, the Mille Miglia, and Le Mans victories made the 166 the only car ever to win all three races.
A 166 chassis fitted with the larger 195 S engine went on to win the 1950 Mille Miglia with Giannino Marzotto and Marco Crosara.
The oldest Ferrari with undisputed lineage, chassis s/n 002C — originally a 159 and later rebuilt as a 166 Spider Corsa — is owned and regularly driven by James Glickenhaus. Chassis s/n 0052M, a 1950 166 MM Touring Barchetta, was discovered in a barn and publicly revealed for the first time since 1959 in the August 2006 issue of Cavallino magazine. One particularly notable 166 MM (1949, s/n 0018M) was bodied by Zagato in a Panoramica style akin to their one-off Maserati A6 1500 design by Vieri Rapi, making it the first Ferrari coachbuilt by Zagato; it was later rebodied as a Zagato Spyder and the original was recreated in 2007 as part of Zagato's Sanction Lost programme.
The 166 MM's competition record directly established Ferrari's international reputation in the years immediately following the company's founding. Its victories at Le Mans, the Mille Miglia, and the Targa Florio within a single racing season gave Enzo Ferrari the credibility to build what became the dominant force in European sports car racing through the following decade. The barchetta body form pioneered on the 166 MM influenced the aesthetic direction of open Italian sports cars for years thereafter. The 166 was ultimately succeeded by the 2.3-litre 195 S.