Montague Napier inherited the family engineering business in 1895, at a time when it had dwindled to as few as seven employees. His acquaintance with Selwyn Francis Edge — then a manager at Dunlop Rubber and an amateur motorsport enthusiast — transformed the firm's ambitions. Edge persuaded Napier to improve a Panhard racing car, and Napier responded by designing his own vertical-twin engine with electric ignition, superior to the Panhard's hot-tube system. Recognising the publicity value of racing earlier than any other British manufacturer, Napier committed to a sustained competition programme that would carry the company's name into international motor sport.
Napier's competition debut came in 1900. Edge entered an 8 hp Napier in the Automobile Club's Thousand Miles Trial — a 1,600 km circuit from Newbury to Edinburgh and back — where it won its class and was among the few finishers. Edge also entered a 16 hp car in the Paris–Toulouse–Paris race that year, with Charles Rolls (later co-founder of Rolls-Royce) as riding mechanic, though that entry retired with ignition and cooling problems.
The decisive breakthrough came at the 1902 Gordon Bennett Cup. Napier entered a shaft-drive 6.44-litre four-cylinder car wearing what would become known as British racing green — the colour that thereafter identified British motor racing entries. Edge and his cousin Cecil piloted it to victory after all other competitors retired. It was the first British victory in international motorsport, a distinction that would not be repeated until Henry Segrave won the French Grand Prix in 1923.
Because the Gordon Bennett rules required the host nation to be the previous year's winner, Napier's 1902 triumph brought the 1903 race to the United Kingdom. Three shaft-driven Napiers defended British honour on a circuit south of Dublin. Two crashed and the third was disqualified, but the event cemented the relationship between Napier and British racing identity. At the 1903 Gordon Bennett, Edge drove the enormous Type K5, an 80 hp car producing 838 cubic inches of displacement (approximately 13,726 cc).
Napier continued to field cars at the Gordon Bennett Cup through 1905, as well as at the Ormonde Beach speed trials in Florida, where the L48 six-cylinder — a 920 cubic inch (15-litre) machine — set the flying mile record at 104.65 mph in January 1905. The versatile 1,200-employee factory at Acton fielded cars across multiple classes, and Dorothy Levitt, Edge's secretary, drove a 100 hp development car to set a women's speed record of 90.88 mph at the Blackpool Speed Trials in 1906.
At Brooklands, opened in 1907, Napier engineer H. C. Tryon won the first ever event in a 40 hp Napier. Edge made a celebrated 24-hour run in June 1907, covering 1,581 miles at an average of 65.905 mph — a record that stood for 18 years. Frank Newton pushed a stroked L48 to 119.34 mph over a half-mile at Brooklands in 1908.
The company's final outright race victory came at the 1908 Tourist Trophy, where Napier entered under the alias "Hutton" to protect the reputation of its six-cylinder road cars. Willy Watson drove the four-cylinder entry to the win.
After withdrawing from circuit racing, Napier engines continued to feature in land speed record attempts through a different medium: aero engines. The Napier Lion, a W-block 12-cylinder developed late in the First World War, powered Malcolm Campbell's Napier-Campbell Blue Bird to the land speed record in 1927 and again in 1931, Henry Segrave's Golden Arrow in 1929, and John Cobb's Napier-Railton, which held the land speed record from 1939 to 1964. Napier also won the inaugural British International Harmsworth Trophy for speedboats at Cork Harbour in 1903, driven by Dorothy Levitt.
The company ultimately became far better known for aero engines — including the Second World War Sabre, producing 3,500 hp in its final versions — than for motor cars, but the racing programme of 1900 to 1908 left a permanent mark: the first British international win, the adoption of British racing green, and a string of speed records that set the competitive template for British motorsport for decades.