When the World Rally Car regulations were announced in 1996, Ford lacked a suitable vehicle. Production of the Escort Cosworth had ended that year, and the upcoming Ford Focus was still in early development. Ford Motorsport decided to compete in the 1997 and 1998 WRC seasons with an Escort adapted to meet the new World Rally Car regulations. In late 1996, M-Sport was contracted to run the Ford World Rally Team, with Ford’s Boreham facility continuing as the research and development center. The car was first presented at the end of the 1996 Rally Catalunya.
The Escort WRC featured significant updates to bring it into compliance with the new regulations. A key upgrade, homologated on July 1, 1997, was the introduction of a six-speed X-Trac sequential gearbox, replacing the previous "H" linkage pattern. Further evolutions were made to the suspension, electronic systems, and electronic differential control. Later in its life, the car benefitted from a new engine developed by Tom Walkinshaw Racing (TWR).
The car debuted at the 1997 Monte Carlo Rally with Carlos Sainz and Armin Schwarz as factory drivers. Sainz immediately achieved a strong second-place finish, a result he repeated in Sweden. At the Safari Rally, Sainz retired due to mechanical issues, while Schwarz finished fourth. Schwarz then secured third place in Portugal, with Sainz again failing to finish. Both Escorts failed to score points in Spain, but Sainz recovered to take second in Corsica.
For the rally in Argentina, Juha Kankkunen, a four-time World Champion, replaced Schwarz. Kankkunen quickly demonstrated strong performance, and at the Acropolis Rally in Greece, Ford achieved a one-two finish with Sainz winning ahead of Kankkunen. They repeated this 2nd and 3rd place finish in New Zealand, where the Escort WRC also received the aforementioned gearbox and other updates. Kankkunen followed up with a second-place finish in Finland, before another one-two victory for Ford at the Rally of Indonesia, with Sainz first and Kankkunen second – this being the Escort WRC’s last worldwide win. In Sanremo, Sainz finished fourth and Kankkunen sixth. Sainz retired while leading in Australia, and in the final rally of the year in Wales, Kankkunen finished second, ahead of Sainz in third.
In 1998, following Carlos Sainz’s move to Toyota, Ford fielded Juha Kankkunen and Bruno Thiry, who had previously driven for Ford in 1995 and 1996 with a Group A Escort. The season began promisingly, with Kankkunen finishing second in Monte Carlo and third in Sweden, while Thiry finished sixth and eighth respectively. At the Safari Rally and Rally of Portugal, Thiry was replaced by Ari Vatanen due to injury. Vatanen finished third in the challenging Safari Rally, with Kankkunen second. In Portugal, Vatanen was fifth and Kankkunen seventh.
Thiry returned for the Rally of Spain, but both cars retired – Kankkunen crashing and Thiry suffering a mechanical failure. In Corsica, Thiry showed pace but finished fifth after some errors, while Kankkunen finished ninth. Kankkunen finished third in both Argentina and Greece, while Thiry retired from both rallies due to engine failure. Thiry crashed in New Zealand, while Kankkunen finished fourth. After Kankkunen’s third place in Finland, the season continued quietly for the Ford drivers.
The Ford Escort’s final rally with the works team ended with a double podium finish at the Rally Great Britain.
After the works team switched to the Focus WRC in 1999, the Escort WRC continued to be run by privateers until 2000.