The origins of the 190 E 2.3-16's racing programme trace back to the late 1970s, when Mercedes-Benz sought a platform for returning to motorsport. The company initially commissioned Cosworth to develop a high-performance engine for a rally programme, targeting 320 hp for a 190 E-based rally car — internally coded project WAA at Cosworth. However, the arrival of the Audi Quattro with its all-wheel drive system and turbocharged engine made a two-wheel-drive naturally aspirated car appear outclassed in rallying.
Mercedes redirected its ambitions toward the DTM, where the regulations required cars to be based on a roadgoing production model. To homologate the race car, Mercedes had to put a detuned version of the Cosworth engine into series production. The result was the road-going 190 E 2.3-16, which debuted at the 1983 Frankfurt Motor Show after establishing its credentials at the Nardo testing facility in Italy, where three cars set three world records with a combined average speed of 154.06 mph (247.94 km/h) over a 50,000 km endurance test, setting twelve international endurance records.
The 2.3-16 engine at the heart of the car was developed by Cosworth from Mercedes' existing M102 four-cylinder 2.3-litre 8-valve unit. Cosworth designed a new cylinder head using their proprietary light alloy casting process, adding dual overhead camshafts and four valves per cylinder — sixteen valves in total. The oversquare 95.50 x 80.25 mm bore and stroke dimensions allowed the engine to rev freely to a 7,000 rpm redline.
In road-going trim, the 2.3-litre 16-valve engine produced 183 hp (136 kW) at 6,200 rpm and 236 N·m of torque at 4,500 rpm, enabling a 0–100 km/h time of under eight seconds and a top speed of 230 km/h (143 mph). The road car's engine was detuned from the full racing specification through reduced inlet and exhaust port sizes, different camshaft profiles, the removal of dry sump lubrication, and replacement of the specialised Kugelfischer fuel injection with a Bosch K-Jetronic system.
For racing, private teams — most prominently AMG, then a separate racing and tuning company — prepared the engines back to higher states of tune. In their final incarnations, the engines produced up to 350 bhp (261 kW) in full racing specification.
The production road car featured a limited-slip differential as standard, along with a Getrag five-speed manual gearbox with a distinctive dog-leg shift pattern. The body kit reduced the drag coefficient to 0.32, and the suspension was lowered and stiffened compared to the standard 190 models.
Private teams entered the 190 E 2.3-16 in DTM competition from the mid-1980s, with AMG — already experienced in touring car racing — becoming the primary force behind the car's racing effort. AMG's preparation work included engine tuning adding approximately 25 hp over the standard car, along with aerodynamic enhancements such as rear spoilers, front splitters, and alloy wheels.
The 190 E 2.3-16 competed against the BMW M3 through the late 1980s in a hard-fought touring car rivalry. As the BMW M3 Evolution variants gained power and the Cosworth-engined Ford Sierra RS mounted a turbocharged challenge, it became clear the 2.3-litre car was reaching the limits of its competitiveness.
To keep pace with its rivals, Mercedes developed homologation special variants of the 190 E. The 190 E 2.5-16, launched in 1988, replaced the 2.3-litre engine with an enlarged 2.5-litre unit (project code WAB at Cosworth), offering more power and torque while addressing reliability concerns with the single-row timing chain of the earlier engine. The 2.5-litre engine produced up to 204 PS (150 kW) in road trim without a catalytic converter.
In March 1989, the 190 E 2.5-16 Evolution I was unveiled at the Geneva Motor Show specifically to meet DTM homologation requirements. Only 502 units were produced to satisfy the rules. The Evo I featured a redesigned short-stroke engine allowing a higher rev limit, new rear spoiler, wider wheel arches, and adjustable ride height. An optional AMG PowerPack, available for DM 18,000, lifted power by approximately 30 hp to 225 PS (165 kW).
The Evolution II followed at the 1990 Geneva Motor Show, again in a homologation run of 502 units — all of which sold before the car was officially revealed. The Evo II featured a radical body kit designed by Professor Richard Eppler of the University of Stuttgart, including a large adjustable rear wing and rear window spoiler, reducing drag to a coefficient of 0.29 while increasing downforce. With the AMG PowerPack fitted as standard, the Evo II produced 235 PS (173 kW) at 7,200 rpm.
A notable early showcase for the 190 E was the 1984 Nürburgring Race of Champions, held to mark the inauguration of the new, shorter Nürburgring circuit. The event featured current and former Formula 1 drivers competing in identical 190 E road cars. A then little-known Ayrton Senna took first place, an early demonstration of his exceptional wet-weather and circuit-reading abilities.
The 190 E 2.3-16's DTM campaign established Mercedes-Benz's serious return to touring car competition and helped define the character of the early DTM as a manufacturer-supported series. The development partnership with Cosworth — one of the most respected engine builders in motorsport — produced technology that influenced both the racing and road car sides of Mercedes' lineup. The homologation Evolution models became highly sought collector cars, with the Evolution II in particular regarded as one of the most significant touring car road cars of the 1980s. AMG's involvement in the programme also deepened the relationship between the tuning house and Mercedes-Benz that would eventually result in AMG becoming a fully integrated division of the company.