The rally began as the Royal Automobile Club Rally in 1932. Of the 367 crews entered, 341 started from nine different towns across Britain — London, Bath, Norwich, Leamington, Buxton, Harrogate, Liverpool, Newcastle upon Tyne, and Edinburgh — all converging on Torquay. The competitive element at this first event consisted entirely of tests at the finish rather than timed stages on the road, and no outright winner was formally declared. Colonel A. H. Loughborough, driving a Lanchester, accumulated the fewest penalty points in the decisive tests.
The event ran annually until 1939, suspended during the Second World War, and resumed in 1951 as the RAC International Rally of Great Britain, now covering a comprehensive touring route of around 1,800 miles taking in Scotland, Wales, and England. The first declared outright winner under this format was Ian Appleyard in 1953, driving a Jaguar XK120, in an event that also formed part of the inaugural European Touring Championship.
The character of the rally changed decisively in 1960 when organising secretary Jack Kemsley negotiated access to a closed two-mile gravel road named Monument Hill in Argyll, Scotland. The Swedish driver Erik Carlsson won, incurring no penalty points. His co-driver Stuart Turner later described Monument Hill as the turning point at which the RAC Rally shifted from a navigational exercise to the stage-based format recognisable today.
By 1961, rough gravel forestry roads across Britain were opened to competitors and the results were based primarily on stage times rather than road penalties. The event quickly established a reputation as one of the most demanding and unpredictable rounds on any international calendar. By 1965 the route included more than 400 miles of special stages across 57 tests. The introduction of proper timing equipment and seeded entry orders completed the transformation into a modern rally event.
Lombard North Central, the finance company then known as Lombank, took over title rights in 1974 and the event became the Lombard RAC Rally. The sponsorship lasted for nearly two decades and the Lombard branding became so closely associated with the event that many in the sport simply called it "the Lombard."
The 1970s saw the introduction of ticketed spectator stages at stately homes and public venues — Chatsworth House and Sutton Park among them — which drew large crowds from urban centres and helped manage the growing numbers of fans attending forest stages. These short, accessible stages were sometimes dismissed by competitors as offering little sporting challenge, but they contributed meaningfully to the event's finances and public profile.
The Lombard RAC Rally played a significant role in the Group B era. The 1986 event was the last European WRC round for Group B machinery, staged after the class had already been banned for 1987 following the deaths of Henri Toivonen and co-driver Sergio Cresto at the Tour de Corse and the spectator fatalities at Rally Portugal earlier in the season. Peugeot's Timo Salonen won the 1986 RAC Rally ahead of Lancia's Markku Alén, with Juha Kankkunen third — a result that sealed Kankkunen's first drivers' championship. The 1985 event had been the longest running to date, totalling 3,465 kilometres with 79 hours of driving across six days. Following Toivonen's death, limits on overall length and stage distance were introduced.
The 1981 event saw the worst attrition in the rally's history, with only 54 of 151 starters completing the route — compared to just six retirements from 237 starters at the 1938 event.
Because the rally was traditionally the final round of the WRC, it regularly staged championship deciders. In 1991, Lancia's Juha Kankkunen edged out Toyota's Carlos Sainz after Sainz suffered engine problems and went off the road in Kielder Forest. In 1992, Sainz won the rally and the championship after both Kankkunen and Didier Auriol were eliminated by mechanical failures. In 1995, Scotsman Colin McRae won his second consecutive RAC Rally to claim his first world title in front of an estimated two million spectators lining the forest stages, with his team declared at Chester Racecourse.
McRae won again in 1997 but lost the title to Tommi Mäkinen by a single point. The 1998 event saw Mäkinen crash out on a spectator stage early in the event after hitting a patch of oil, apparently handing the championship to Toyota's Carlos Sainz. Sainz then suffered an engine failure just 300 metres from the finish line of the final stage, allowing Mäkinen to claim the title. His co-driver Luis Moya famously threw his helmet through the car's rear window.
Nordic drivers dominated the rally's winner's list across its history. Erik Carlsson of Sweden won a hat-trick between 1960 and 1962. Hannu Mikkola of Finland won four times across 1978, 1979, 1981, and 1982. Petter Solberg of Norway took four consecutive victories between 2002 and 2005 before Sébastien Ogier surpassed all previous records with five wins between 2013 and 2018. The last Nordic victory as of the rally's final running came from Jari-Matti Latvala in 2012.
Lombard's title sponsorship concluded after nineteen years. The event subsequently became the Network Q RAC Rally and later the Network Q Rally of Great Britain. The RAC branding was dropped entirely in 1998 as part of a restructuring of the RAC's commercial activities. From 2003 the Welsh Assembly became the title sponsor, cementing the rally's foothold in Wales under the Wales Rally GB name that it carried until its final running in 2019.