Roger Penske built his racing organisation from 1968 onward, establishing a reputation in Can-Am and IndyCar before turning to Formula One. In 1973 he purchased the facilities of the small British constructor McRae Cars Ltd in Poole, Dorset, giving the team a European base from which to contest the world championship. Heinz Hofer was installed as F1 manager, with Geoff Ferris serving as chief engineer and designer, and Karl Kainhofer as long-standing chief mechanic and engine builder.
Penske's first contact with F1 had come as a sponsor rather than a constructor: in 1971 he supported a McLaren entered in the Canadian and United States Grands Prix by privateer teams associated with Kirk White, with Mark Donohue taking a podium finish in Canada.
The team's own car, the Penske PC1, debuted at the 1974 Canadian Grand Prix at Mosport Park. An aluminium monocoque chassis built around a Ford Cosworth DFV 3.0-litre V8 engine and a Hewland FG 400 gearbox, it was driven by Mark Donohue, who had retired from competitive driving after 1973 but returned specifically for the F1 project. Donohue qualified 24th and finished 12th on debut, and the team scored no points that season.
For 1975 Penske planned a full campaign with the PC1. Donohue managed a fifth place at the Swedish Grand Prix, and the car accumulated two World Championship points across the season. After the French Grand Prix the PC1 was set aside in favour of a March 751 for three races. At the Austrian Grand Prix, Donohue crashed badly in practice, suffered severe concussion, underwent emergency surgery, and died from his injuries. The tragedy cast a shadow over the entire Penske F1 effort. For the United States Grand Prix the team returned with Northern Irish driver John Watson, who was forced to fall back from the new PC3 to the spare PC1 and finished ninth.
The 1976 season brought Penske's best Formula One result. Watson was retained and given the new PC3, which was quickly evolved into the more competitive PC4. A Citibank sponsorship deal provided financial backing. Watson scored a fifth at the South African Grand Prix at Kyalami in the PC3, then took two podiums with the PC4 — third place in France and second in Britain. At the Austrian Grand Prix at Spielberg, Watson and the Penske PC4 won outright, a result that has never been repeated by an American-licensed constructor in a Formula One world championship race.
Despite the breakthrough victory, Roger Penske chose to withdraw from Formula One at the end of 1976 to concentrate solely on IndyCar racing. The European operation was sold to German businessman Günter Schmid.
Schmid ran the now-yellow PC4 under the ATS Racing Team banner in 1977. Jean-Pierre Jarier scored the team's single championship point at the United States Grand Prix West. Additional PC4 entries were made for Hans Heyer (who controversially started the German Grand Prix without having qualified) and Hans Binder, but performance declined rapidly and Schmid withdrew after the Italian Grand Prix.
A third PC4 chassis was built by Penske for the Interscope Racing team, which ran American driver Danny Ongais at the United States and Canadian Grands Prix without result. In 1979, Penske also designed the Rebaque HR100 for Mexican privateer Héctor Rebaque, but the car failed to qualify or finish in its three entries.
Penske's Formula One chapter was brief — three seasons as a works entrant — but historically significant. The 1976 Austrian Grand Prix victory stands as the last Formula One world championship win by an American constructor. Watson went on to a long career with McLaren, where he twice stood on the podium in championship seasons. Penske himself returned his full attention to American racing, where Team Penske became the most successful IndyCar organisation in history, eventually surpassing twenty victories at the Indianapolis 500.