Roger Penske formed Penske Racing in 1968, building the team's reputation in American motorsport before turning to Formula One. In 1973, he purchased the facilities of small racing car manufacturer McRae Cars Ltd in Poole, Dorset, providing a UK base for the F1 programme. Swiss manager Heinz Hofer was appointed F1 team manager, with Geoff Ferris as chief engineer and designer. Karl Kainhofer, Penske's long-standing chief mechanic and engine builder, joined the UK operation in mid-1974.
The team unveiled their first car, the PC1, in late summer 1974. It was an aluminium monocoque chassis built around a Ford Cosworth DFV 3.0-litre V8 engine and a Hewland FG 400 gearbox. Penske brought back retired driver Mark Donohue, who had previously driven for Penske in IndyCar and had made brief Formula One appearances in a Penske-sponsored McLaren in 1971.
The PC1 debuted at the 1974 Canadian Grand Prix at Mosport Park, where Donohue qualified 24th and finished 12th. No championship points were scored in 1974.
For 1975, Penske planned a full season with the PC1, but it became a difficult and ultimately tragic campaign. Donohue scored isolated points finishes including fifth in Sweden and eighth in the Netherlands. After the French Grand Prix, the team entered a March 751 while the new Penske PC3 was developed. At the Austrian Grand Prix, Donohue crashed heavily in the final practice session in the March, suffering severe head injuries. He briefly regained consciousness but died after an emergency operation to relieve pressure on his brain. A track marshal was also killed in the accident. The team scored two World Championship points during 1975.
Northern Irish driver John Watson replaced Donohue and drove the newly developed Penske PC3 for the 1976 season. The car, again designed by Geoff Ferris, proved to be a genuine front-running machine. Watson qualified on pole position at the 1976 Austrian Grand Prix and converted it into victory — the only Formula One Grand Prix win in Penske's history and the last for an American-entered team in the World Championship.
Despite the Austrian triumph, Penske withdrew from Formula One at the end of 1976. Roger Penske chose to redirect the team's resources back to American motorsport, where IndyCar and NASCAR opportunities presented a clearer commercial return. Watson subsequently moved to McLaren, where he would develop into a regular Grand Prix winner.
Penske Racing's Formula One adventure remains a significant footnote in the sport's history: the only American team to win a Formula One Grand Prix in the modern era, and the last to do so as of 2025. Mark Donohue's death at the Austrian Grand Prix cast a long shadow over the team's abbreviated campaign, making Watson's win at the same circuit the following year a poignant achievement. Roger Penske went on to build one of the most successful operations in American motorsport history, winning numerous IndyCar championships and Indianapolis 500s under the Team Penske banner.