The team was formed in 2001 as an expansion of Tom Walkinshaw Racing's existing Holden Racing Team operation, initially operating commercially as the K-Mart Racing Team. Because regulations limited a team to three cars under a single Racing Entitlement Contract, an additional REC was leased from Romano Racing to field two K-Mart cars alongside a Holden Young Lions entry. Todd Kelly and Greg Murphy drove the two K-Mart Commodores in the first season, with Murphy winning the V8 International at Pukekohe Park Raceway and Kelly claiming the V8 Ultimate at Sandown Raceway to round out 2001.
For 2003 the cars were entered under a leased REC from John Faulkner Racing, with Rick Kelly joining brother Todd as drivers. Following the collapse of Tom Walkinshaw Racing in February 2003, Holden briefly owned the team before quickly selling it to John and Margaret Kelly — the parents of Rick and Todd — as regulations prohibited manufacturers from owning race teams.
The team's defining moment came in 2003, when Greg Murphy produced what became known as the Lap of the Gods in the Bathurst 1000 Top 10 Shootout — a lap that set a new circuit record at the time. Murphy and Rick Kelly won the race that year, with Kelly becoming the youngest winner in the event's history. The pair repeated the feat in 2004, giving the team back-to-back Bathurst victories.
In 2005 Greg Murphy departed and was replaced by Garth Tander. K-Mart ended its sponsorship and the team was rebranded as the HSV Dealer Team. The early part of 2005 was difficult, but form improved and the team quickly emerged as the category's dominant force. In 2006 Toll Group joined HSV as a title sponsor, creating the Toll HSV Dealer Team identity. Rick Kelly won the 2006 V8 Supercars championship, and Tander followed by claiming the 2007 title, giving the team consecutive Drivers Championships alongside Teams Championship success in both years.
A notable arrangement during the 2006 endurance season saw the HSV Dealer Team and the Holden Racing Team swap co-drivers, primarily to separate Tander and Kelly who were running first and second in the championship. Tander co-drove with Mark Skaife at HRT while Todd Kelly returned to the HSV operation. The regulatory loophole that permitted the swap was subsequently closed.
In 2008 Tander transferred to the Holden Racing Team, taking the Toll sponsorship with him, and was replaced by Paul Dumbrell. The team ran with Autobarn and then Opes Prime colours alongside continuing HSV backing before Toll Group rejoined midway through the season following Opes Prime's collapse. Rick Kelly won the team's final race at Oran Park Raceway in December 2008 — also the last championship race held at that circuit before its demolition.
At the end of 2008, John Kelly announced the team's closure. He established Kelly Racing for 2009 in partnership with Perkins Engineering, fielding four Holden Commodores with both Kelly brothers competing together for the first time. Separately, Walkinshaw Performance continued racing by forming Walkinshaw Racing to complement the Holden Racing Team, with Paul Dumbrell and David Reynolds driving in 2009.
The HSV Dealer Team occupies an important place in Australian touring car history through its two Bathurst 1000 victories and back-to-back V8 Supercars championships in 2006 and 2007. Murphy's 2003 Lap of the Gods at Bathurst remains one of the most celebrated qualifying laps in the race's history, and Rick Kelly's status as the youngest Bathurst 1000 winner was set during the team's most successful period.