The site has its roots in a go-kart centre opened in 1972 by the Finnskoga Motorklubb, inspired partly by the wave of interest in motorsport that followed Swedish drivers into Formula One during that era. The go-kart facility fell into disuse relatively quickly, and in October 1974 the decision was made to convert a nearby gravel pit into a dedicated rallycross circuit.
Construction was completed and the circuit held its first competitive event on 1 February 1976. The inaugural meeting drew 3,500 spectators to what was a bitterly cold winter's day, and the opening race was won by Per Eklund.
Following its opening the circuit established itself successfully at the local and regional level. The Finnskoga Masters was created as a headline event for Scandinavian competitors. However, the circuit's path to international recognition was complicated by a long-running dispute between the Finnskoga Motorklubb and the Swedish national motorsport federation, the Svenska Bilsportförbundet (SBF). Because of this institutional conflict, the SBF did not immediately recommend Höljesbanan for inclusion on the FIA European Rallycross Championship calendar, despite the venue's evident quality.
The circuit eventually made its international debut on 7 July 1991, hosting the Swedish round of the European Rallycross Championship for the first time. The event attracted 15,000 spectators and received strongly positive reactions from drivers and fans alike, establishing immediately that the venue had the atmosphere and character to succeed at the highest level.
Through the 1990s the Swedish round of the European Rallycross Championship rotated between several different circuits. Höljesbanan became the permanent host of the Swedish round in 1999, a status it has retained ever since. With the formation of the FIA World Rallycross Championship, Höljes became one of the marquee events on the world calendar.
The event held at Höljes is traditionally staged over the first weekend of July and has earned the nickname the "Magic Weekend" in rallycross circles. The combination of the circuit's remote forest setting in Värmland, the close proximity to the Norwegian border drawing large cross-border Scandinavian crowds, and the atmosphere generated by the venue's natural amphitheatre characteristics have made the Höljes round one of the most anticipated events in the rallycross season. The setting along the Klarälven river, surrounded by forest, gives the venue a character unlike any other circuit on the championship calendar.
Höljesbanan represents the pinnacle of atmosphere in rallycross. Having overcome early institutional obstacles to reach the international stage, the circuit became a permanent fixture and is considered essential to the identity of European and World rallycross. Its status as the site of the "Magic Weekend" means that even within a global championship field, Höljes carries unique emotional weight for competitors and the sport's fanbase. The circuit's trajectory from a converted gravel pit to one of the world's most famous rallycross venues over a period of roughly two decades is central to the story of how Scandinavian rallycross rose to dominate the sport internationally.