Development began in 2004 when Dave Kaemmer, co-founder of Papyrus Design Group — the studio behind Indianapolis 500: The Simulation, NASCAR Racing, and Grand Prix Legends — partnered with John W. Henry to form FIRST.net LLC. The new company acquired the source code to NASCAR Racing 2003 Season, which Kaemmer then used as a foundation. The final product retained the multi-body physics system of NR2003, along with elements of track presentation and multiplayer networking code, while replacing or entirely rebuilding everything else, including the tyre model and graphics engine.
iRacing uses LIDAR scanning to produce digital reproductions of real tracks and cars, and restricts most players to a cockpit-only camera view during races. The service operates in 13-week competitive seasons, with four seasons per year. New content and feature updates are released in the week before each new season begins.
The game covers five disciplines: sports cars, formula cars, oval, dirt road (comprising rallycross and trophy truck racing), and dirt oval. The base subscription includes 24 cars and 32 tracks; additional content is available for individual purchase. By the mid-2020s the catalogue contained more than 100 cars and tracks.
Dynamic weather including rain was added in Season 2 of 2024, though not all series immediately supported wet conditions. A day-night cycle produces temperature variation across a race. Support for AI opponents was introduced in late 2019 and expanded gradually.
New players begin with a Rookie licence. After Rookie, iRacing uses letter grades — D, C, B, and A — to regulate access to official series. Advancement requires meeting minimum participation requirements at an appropriate licence level and improving one's Safety Rating. A Pro licence exists for players who qualify for top-tier eSports competitions such as the eNASCAR iRacing Series and the Porsche eSports Supercup.
Safety Rating is calculated as a no-blame metric: corners-per-incident across a large rolling sample of recent driving. All drivers involved in a contact incident receive the same penalty regardless of fault. Separately, an Elo-type driver rating called iRating splits race sessions into skill-appropriate groups.
NASCAR has been a partner since 2010, culminating in the eNASCAR Coca-Cola iRacing Series, the Road to Pro Series, and an International Series. During the COVID-19 pandemic in 2020, the eNASCAR iRacing Pro Invitational attracted nearly a million viewers in a single broadcast on FS1, demonstrating the mainstream appeal of sim racing as broadcast entertainment.
IMSA partnered with iRacing in 2020, adding the IMSA Hagerty iRacing Series and related endurance and prototype competitions. World of Outlaws began a partnership in 2018 to run eSports championships for both late model and sprint car categories. Porsche has collaborated with iRacing since 2017 and sponsors the Porsche eSports Supercup. The FIA announced an official partnership in May 2023.
NASCAR Hall of Fame member Dale Earnhardt Jr. was named executive director at iRacing in November 2020.
Over December 2021 and January 2022, iRacing acquired Orontes Games — developer of the Orontes game engine — and Monster Games, creator of multiple NASCAR console titles. Both remained independent, though key personnel including Monster's co-founder Richard Garcia and Orontes lead developers Christian and Thorsten Folkers were absorbed into iRacing's development organisation.
By July 2009 iRacing had more than 16,000 subscribers. The figure reached 50,000 by December 2013, and by April 2020 the company reported more than 160,000 active subscribers. Critical reception has been broadly positive among motorsport simulation audiences, with praise directed at the accuracy of the physics and the quality of competition structures, while some critics noted that features common to other simulators — such as advanced visual damage modelling — were slower to arrive.