Osella was founded in Volpiano, Italy in 1965 by former rally driver Enzo Osella. The company initially built and raced Abarth sports cars, before taking over the Abarth factory sports car program in 1974 and moving into single-seater racing. Success in Formula Two — particularly when American driver Eddie Cheever won three races in 1979 aboard the FA2 and finished fourth in the championship — gave Osella the confidence and sponsorship funds, courtesy of the Ente Tabacchi Italiani tobacco company, to attempt Formula One.
Osella's first Formula One car, the FA1, was designed by Giorgio Stirano. Powered by the Ford Cosworth DFV, it was presented in a black and white livery with prominent Denim branding on the sidepods when it debuted for the 1980 season. Cheever qualified regularly but managed to finish only one race across the entire season. The car suffered from persistent unreliability and aerodynamic inefficiency, with many components manufactured in-house in a cost-cutting strategy that frequently resulted in poorly engineered solutions.
The team fielded two cars for the 1982 season, one for Jean-Pierre Jarier and one for Riccardo Paletti. Osella hired Giorgio Valentini and Tony Southgate to design an updated chassis, but high-tech solutions remained beyond the team's financial reach. Jarier finished fourth at Imola in 1982 — in a race where only 14 cars started — and scored the team's first World Championship points in the car by then designated the FA1C. The season ended in tragedy when Riccardo Paletti was killed in a start-line accident at the 1982 Canadian Grand Prix.
In the mid-1980s, Osella gained access to factory Alfa Romeo engines in both naturally aspirated and turbocharged forms, beginning in 1983. The Alfa turbo engine, the 890T, helped the team survive the increasingly expensive turbo era, but it could not improve Osella's competitiveness in a meaningful way. The engine was chronically unreliable, and power output had to be reduced simply to achieve race-finishing reliability. Beginning with the FA1F in 1984 — which was based on the 1983 works Alfa Romeo 183T chassis — all subsequent Osella models through to the FA1L in 1988 traced their design lineage to that initial Alfa-derived package.
Ghinzani scored Osella's second championship points with a fifth-place finish at the 1984 Dallas Grand Prix. During 1986 and beyond, financial desperation forced the team to rely on pay drivers who brought sponsorship money rather than outright speed. Drivers including Alex Caffi and Gabriele Tarquini gained early career experience with the team, though they could not advance Osella's competitive position.
For 1988 — the final year of the turbo era — Enzo Osella rebranded the Alfa 890T as the "Osella V8" after Alfa's parent company Fiat refused to allow the Alfa Romeo name to be associated with the team's poor results any longer. Despite promising pre-season test times from Nicola Larini at Monza, the FA1L struggled badly in competition, with Larini frequently failing to qualify or pre-qualify.
The 1989 season brought modest improvement. A new chassis, the FA1M, powered by the Cosworth DFR engine, showed better qualifying pace — Larini qualified tenth at the Japanese Grand Prix — but still rarely reached the finish line through the season due to mechanical failures. At the Canadian Grand Prix, Larini ran as high as third during the race before retiring when water ingress caused electrical failure in the FA1M. At the final race of 1989 in Australia, veteran Ghinzani suffered a high-speed collision and subsequently announced his retirement.
In 1990, Enzo Osella sold a stake in the team to Gabriele Rumi, whose Fondmetal company became a title sponsor. A single car ran for French driver Olivier Grouillard through the season. At the end of 1990, Rumi took full control and renamed the team Fondmetal, bringing Osella's Formula One involvement to a close.
Across their decade in Formula One, Osella achieved just two points finishes and scored five World Championship points in total — a modest return by any measure, but the team's longevity reflected Enzo Osella's persistent determination to compete at the sport's highest level on limited resources. Several drivers who cut their teeth in Osella cars — including Caffi and Tarquini — went on to notable careers elsewhere. Outside of Formula One, the Osella name remained prominent in Italian hillclimb racing, where the company's sports cars proved highly competitive well into the 2000s.