Peugeot Talbot Sport was founded at 8 rue Paul Bert in Boulogne-Billancourt near Paris. Its Group B machine, the 205 Turbo 16, debuted in the 1984 WRC season and took its first victory at Rally Finland with Ari Vatanen. The 1985 campaign was dominant: Vatanen and Timo Salonen between them won seven of the twelve rounds, delivering Salonen the drivers' title and Peugeot its first manufacturers' crown. After Vatanen was seriously injured in Argentina in 1985, Juha Kankkunen stepped in and secured a second consecutive manufacturers' title in 1986. The FIA banned Group B machinery for 1987 following the fatal accident of Henri Toivonen, closing that chapter.
With Group B gone, Peugeot redirected its motorsport energy to rally raid. The 205 won the Dakar Rally in both 1987 and 1988; its successor, the 405, then claimed back-to-back Dakar victories in 1989 and 1990. The team also contested the Pikes Peak Hillclimb in 1987, 1988, and 1989, winning the final two editions. Peugeot returned to Pikes Peak in 2013 when Sébastien Loeb drove the 208 T16, a 875 kg machine producing 875 bhp from a 3.2-litre twin-turbo V6, to demolish the standing record by over a minute and a half with a time of 8 minutes 13.878 seconds.
In November 1988 Peugeot Talbot Sport launched the 905 prototype programme. The car debuted at the end of 1990 and matured into a race winner: at the 1992 24 Hours of Le Mans, Derek Warwick, Yannick Dalmas, and Mark Blundell drove a 905 to overall victory. Peugeot also took the 1992 World Sportscar Championship with Warwick, Dalmas, Philippe Alliot, and Mauro Baldi. In 1993 the squad achieved a 1–2–3 finish at Le Mans, the winning car crewed by Eric Hélary, Christophe Bouchut, and Geoff Brabham, before withdrawing from endurance racing. Jean Todt departed around the same time to join Scuderia Ferrari.
Peugeot returned to sportscar competition in 2007 with the diesel-powered 908 HDi FAP, taking on the dominant Audi machines. The team won the 2009 24 Hours of Le Mans with David Brabham, Marc Gené, and Alexander Wurz, their first Le Mans triumph since 1993. A withdrawal was announced in January 2012 citing declining car sales and the economic downturn. Peugeot later confirmed a return for the 2022 FIA World Endurance Championship in the Hypercar class.
Peugeot Sport re-entered the WRC in 1999 with the 206 WRC under director Corrado Provera. Marcus Grönholm gave the car its maiden victory at Rally Sweden in 2000, then added wins in New Zealand, Finland, and Australia to clinch the drivers' title. Gilles Panizzi won in Corsica and Sanremo, and Peugeot took the manufacturers' championship. The squad defended the manufacturers' crown in 2001 and 2002. In 2002 Grönholm claimed his second drivers' title, with Richard Burns finishing fifth and Panizzi sixth. A third consecutive manufacturers' title followed.
For 2004 Peugeot introduced the 307 WRC. Grönholm managed only one win that season, in Finland. The 2005 campaign was marked by tragedy: co-driver Michael Park was killed when Markko Märtin's 307 WRC left the road during Rally Great Britain. Märtin subsequently withdrew from the championship. Grönholm won twice and finished third in the standings. At the end of 2005, PSA Peugeot Citroën withdrew Peugeot from the WRC; the team did not return to the top category.
Peugeot Sport created the 207 S2000 for the Intercontinental Rally Challenge, fielding the cars through Kronos Racing. The programme yielded three consecutive IRC drivers' titles: Enrique García-Ojeda in 2007, Nicolas Vouilloz in 2008, and Kris Meeke in 2009. The 207 was later replaced by the 208 T16 competing under R5 regulations.
Peugeot Sport's record in the WRC spans two distinct eras: two manufacturers' titles in the Group B period (1985–1986) and three consecutive titles with the 206 WRC (2000–2002). Combined with Le Mans victories in 1992, 1993, and 2009, Jean Todt's original brief to build a competitive motorsport department was fulfilled many times over. The department's repeated pattern of entering a discipline, achieving championship success, and departing — then returning — defines its distinctive place in international motorsport.