The circuit was commissioned from architect John Hugenholtz and constructed by Alessandro Rocci. Its character is defined by a sequence of tight corners with minimal run-off between the turns, giving drivers little opportunity to recover errors and making clean lap construction essential. The short main straight restricted top speeds and limited the aerodynamic freedom that teams might exploit at faster circuits.
Jarama's most famous moment came at the 1981 Spanish Grand Prix, the last Formula One race held at the circuit. Gilles Villeneuve in a Ferrari 126CK led throughout the race despite being followed closely by four faster cars — Jacques Laffite in a Ligier-Matra, John Watson in a McLaren, Carlos Reutemann in a Williams, and Elio de Angelis in a Lotus. Villeneuve's turbocharged Ferrari had superior straight-line speed but weaker ground-effect aerodynamics through corners; he defended the position lap after lap. The victory proved to be the last of his career.
Following that 1981 race, Formula One deemed Jarama too narrow for modern competition and dropped it from the calendar. The circuit was lengthened in 1991 and upgraded again in 2015.
Jarama entered the touring car championship calendar in 1987 when it hosted Round 2 of the inaugural World Touring Car Championship for Group A cars. The event was the 1987 Jarama 4 Hours. Roberto Ravaglia and Emanuele Pirro won the race driving a Schnitzer Motorsport BMW M3. Pole position had been set by Klaus Ludwig in a Ford Sierra RS Cosworth turbo with a time of 1:31.434. The fastest lap was set by Andy Rouse, also in a Sierra Cosworth, in 1:33.710.
The circuit hosted the World Touring Car Championship during the competition's early years and returned to the touring car calendar under the WTCC format in later seasons.
Jarama hosted the Spanish motorcycle Grand Prix from 1969 through to 1988, with various championship titles in play across those years. The European Touring Car Championship visited the circuit across multiple seasons between 1968 and 2002. The BPR Global GT Series and FIA GT Championship both featured Jarama rounds in the 1990s and early 2000s. The 1000 km of Jarama was held as part of the Le Mans Series in 2006. In more recent years the circuit hosted the FIA ETCR eTouring Car World Cup in 2022 and the TCR Europe Touring Car Series in 2020. The Superleague Formula held Spanish rounds at Jarama in 2009 and 2010.
The circuit now hosts the Formula E Madrid ePrix, TCR Spain Touring Car Championship, the FIA European Truck Racing Championship GP Camiones de España, the F4 Spanish Championship, and the GR Cup Spain as part of its current calendar.
As of March 2026, Klaas Zwart holds an unofficial lap record of 1:16.994 set with a Jaguar R5 during a demonstration event in 2017, though this is not recognised as an official race lap record.
Jarama occupies a significant place in Formula One and motorcycle grand prix history primarily through its longevity as a Spanish venue across two decades. The 1981 defence by Gilles Villeneuve — one of the most celebrated tactical drives in the sport's history — ensures the circuit's permanent presence in the Formula One narrative. Its survival into the modern era as a venue for electric single-seaters and touring cars demonstrates an adaptability that many of its contemporaries have not managed.