The game was in development for three years with a team of between 25 and 30 people. The choice of the 1967 Formula One season was deliberate: the circuits of that era were narrow, lined with trees, buildings, and other roadside elements that in a video game setting enhance the sensation of speed. The primitive suspension designs of the period also allowed the physics engine to produce more visually dramatic car behavior than would have been possible with more modern machinery.
Papyrus co-founder Dave Kaemmer led the project. Recreating the 1967 circuits required significant archival research, because several of the tracks the team wanted to model no longer existed in their original form. Representatives visited town halls across Europe to obtain blueprints of defunct venues. The game was explicitly inspired by the 1966 film Grand Prix.
Licensing the real teams and drivers from the era proved complex. Five of the seven constructors in the game were authentically represented — Brabham Racing Organisation, British Racing Motors, Anglo-American Racers (Eagle), Scuderia Ferrari, and Team Lotus — while Honda and Cooper were replaced by two fictional manufacturers named Murasama and Coventry. Despite the fictional names, the cars and driver assignments for those seats followed the historical season closely. The driver roster included Jack Brabham, Denis Hulme, Chris Irwin, Jean-Pierre Beltoise, Jochen Rindt, Pedro Rodriguez, Jacky Ickx, Jo Siffert, Joakim Bonnier, Dan Gurney, Bruce McLaren, Richie Ginther, Lorenzo Bandini, Chris Amon, Mike Parkes, Ludovico Scarfiotti, Jim Clark, Graham Hill, and John Surtees.
The simulation offered multiple race modes, allowing players to race alone against AI opponents or compete against other players via local area network. A wide range of parameters governing AI driver skill and aggression could be adjusted by the player. The physics model was considered exceptionally unforgiving, accurately representing the lack of aerodynamic downforce and the unpredictable handling behavior of 1960s Formula One cars on the narrow circuits of the era.
Critical reception was strongly positive. GameSpot described Grand Prix Legends as delivering the most intense racing experience ever seen on a personal computer. Next Generation magazine praised the game's graphics, AI, driving model, and historical recreation, placing it at number 47 on its list of the Fifty Best Games of All Time. It was a runner-up for Computer Gaming World's 1998 Best Driving award and for GameSpot's 1998 Driving Game of the Year award, both of which ultimately went to Need for Speed III: Hot Pursuit. It won Sports Game of the Year at Computer Games Strategy Plus and the Best Racing Game award at the 1998 CNET Gamecenter Awards.
Commercial performance was a different story. PC Gamer US journalist Andy Mahood described sales as "abysmally poor." Writer Mark H. Walker reported in 2003 that the game had sold only a few thousand copies in the United States, attributing this to the general lack of interest in Formula One racing in the American market and to a steep learning curve that deterred European buyers. GameSpot's Gord Goble pointed to the combination of treacherous gameplay, slow frame rates, and obscure subject matter as factors that limited its commercial reach. Total sales ultimately reached 200,000 copies by 2004.
Despite its commercial failure on release, Grand Prix Legends became one of the most celebrated titles in sim racing history. Its rigorous physics model, uncompromising difficulty, and faithful historical recreation attracted an audience of dedicated enthusiasts who developed and shared fan-made modifications for many years after the game's release. The modding community extended the game's life well beyond what its publisher could have anticipated, adding new circuits, updated car models, and AI improvements.
The game's influence on subsequent racing simulators was significant. Papyrus went on to develop several of the most respected NASCAR simulations of the late 1990s and early 2000s, and the studio's standards for physics realism set a benchmark that later independent developers consistently cited as an inspiration. Grand Prix Legends remains a reference point in discussions about the history of racing simulation and about how commercial failure does not necessarily determine a title's long-term cultural importance.