Merzario began racing as a test driver with works Fiat Abarths and progressed to GT racing and European mountain climb events. He won the Sardinia Rally in 1963 in an Alfa Romeo Giulietta. His breakthrough came when he won the 1969 Mugello Grand Prix in a 2-litre Abarth, beating a field that included Nino Vaccarella and Andrea de Adamich. That result secured him a drive with the Ferrari sports car team for 1970.
In 1970, Merzario placed third at the 24 Hours of Daytona and fourth in the 1000 km of Monza, both in a Ferrari 512 S. The following year brought wins at Imola and Vallelunga for Ferrari and Abarth respectively.
His finest sports car season was 1972. He won the 1000 km of Spa alongside Brian Redman in a Ferrari 312 PB, and won the Targa Florio paired with Sandro Munari. He was also named European Two-Litre Champion for Abarth and won the Rand 9 Hour race.
In 1973, Merzario took second place at both the 1000 km of Nürburgring and at Le Mans. He won the Targa Florio again in 1975, this time with an Alfa Romeo T33, and continued winning races with Alfa Romeo including four further victories that season. His sports car career extended well into the 1990s; he won the 1985 Italian Prototype Championship and was still active in Italian prototype racing into his sixties.
Merzario made his Formula One debut at the 1972 British Grand Prix at Brands Hatch, scoring a point on his first appearance — one of only a handful of drivers to do so — with a sixth-place finish. He was the last driver to make his Formula One debut with Ferrari until Oliver Bearman at the 2024 Saudi Arabian Grand Prix.
For 1973, Enzo Ferrari retained him for a full season alongside Jacky Ickx. The opening rounds in Brazil and South Africa brought fourth-place finishes in the old 312B2, but Ferrari's updated 312B3 proved disappointing and both drivers struggled. Ferrari overhauled the team entirely for 1974, and Merzario moved to Williams. He scored points at Monza and in South Africa but the Williams machinery was largely uncompetitive. In 1975 he made a one-off appearance at Monza for Copersucar, finishing eleventh, before focusing again on sports cars.
Merzario returned to Formula One in 1976 with the works March team. Dissatisfied with results, he moved mid-season to Wolf — which had recently merged with Frank Williams Racing Cars — replacing Jacky Ickx. Results remained poor.
At the 1976 German Grand Prix at the Nürburgring, Niki Lauda crashed heavily and his Ferrari caught fire. Merzario was among the drivers who stopped — alongside Guy Edwards, Brett Lunger, and Harald Ertl — and helped pull Lauda from the burning wreckage. Thirty-seven years later, Lauda told BBC Radio 5 Live: "Merzario jumped into the fire and, alone, pulled me out of the wreckage so I survived… he really saved my life there, because a couple of seconds more I would have never made it." Six weeks after the accident, when Lauda made his comeback at the Italian Grand Prix, he presented Merzario with his gold Rolex wristwatch in gratitude.
In 1977, Merzario raised enough sponsorship to establish his own Formula One team. The Merzario organisation started with March 761B cars and from 1978 built its own chassis. In three seasons the team was officially classified only once, at the 1977 Belgian Grand Prix at Zolder, where Merzario finished fourteenth. He also accepted a one-off Shadow drive at the 1977 Austrian Grand Prix but retired from that race as well. The team's cars qualified infrequently and retired often; the Merzario M1-BMW fared no better in Formula Two in 1980, after which Merzario withdrew from single-seater competition.
Throughout his Formula One career, Merzario was recognised by his distinctive look: a cowboy hat covered in Marlboro sponsorship patches, which became his trademark and which he has continued to wear throughout his life. His willingness to risk his own safety to save Lauda at the Nürburgring, and Lauda's own emphatic testimony about the event, ensured that his place in motorsport history extends well beyond his points tally.