Peugeot Talbot Sport debuted the Group B Peugeot 205 Turbo 16 in the 1984 WRC season, taking its first victory at Rally Finland with Ari Vatanen. In 1985, drivers Vatanen and Timo Salonen won seven of twelve rounds, delivering Peugeot its first manufacturers' title and Salonen the drivers' championship. Vatanen was seriously injured in a 1985 accident in Argentina and was replaced for 1986 by Juha Kankkunen, who won both the drivers' and manufacturers' titles again. After the FIA banned Group B cars following the fatal accident of Henri Toivonen, Peugeot redirected its efforts to rally raid, using the 205 and later the 405 to win the Dakar Rally in 1987, 1988, 1989, and 1990. The team also competed at the Pikes Peak International Hill Climb in 1987, 1988, and 1989, winning in 1988 and 1989.
Peugeot Talbot Sport launched the Peugeot 905 project in November 1988 to compete in the World Sportscar Championship from 1991. The 905 made its racing debut in the final two rounds of the 1990 season and finished second overall in 1991. In 1992, the team won the 24 Hours of Le Mans with Derek Warwick, Yannick Dalmas, and Mark Blundell, and also took the World Sportscar Championship title. Though no championship was held in 1993, Peugeot achieved a 1–2–3 finish at Le Mans that year, the winning car driven by Eric Helary, Christophe Bouchut, and Geoff Brabham. Peugeot Talbot Sport subsequently withdrew from sportscar racing, and Jean Todt departed to lead Scuderia Ferrari.
Peugeot entered Formula One for 1994 as an engine supplier, fielding a 3.5-litre V10 derived from the 905 programme. The partnership with McLaren produced eight podiums but no victories and seventeen DNFs before ending after 1994. Peugeot then supplied Jordan Grand Prix in 1995, 1996, and 1997, achieving five podiums including a front-row lockout at the 1995 Canadian Grand Prix where Eddie Irvine and Rubens Barrichello finished second and third. Political pressure from France led Peugeot to switch to the Prost Grand Prix team for 1998, 1999, and 2000. The Prost partnership yielded only scattered points — one in 1998 courtesy of Jarno Trulli at Belgium, nine in 1999 including a podium for Trulli at the European Grand Prix — before the relationship collapsed at the end of 2000 after a pointless final season. Peugeot made no Formula One entries after 115 Grand Prix starts and 14 total podiums. The Peugeot engines were subsequently purchased by an Asian consortium operating as Asiatech for use by Arrows in 2001 and Minardi in 2002.
In 1999, Peugeot Sport returned to the World Rally Championship with the Peugeot 206 WRC. Marcus Grönholm gave the car its first victory at Rally Sweden in 2000 and went on to win four rounds, taking the drivers' championship. Gilles Panizzi won two rounds and Peugeot claimed the manufacturers' title. Peugeot retained the manufacturers' championship in 2001 and 2002, with Grönholm winning his second drivers' title in 2002. A third consecutive manufacturers' title followed in 2003, despite Burns being ruled out of the final round. For 2004 Peugeot introduced the 307 WRC, but struggled to match the performance of the previous car, with Grönholm's win in Finland the team's sole victory of the season. Peugeot finished the 2005 season with two wins for Grönholm before PSA Peugeot Citroen withdrew both Peugeot and Citroen from the WRC at the end of that year.
Under new director Michel Barge, Peugeot Sport returned to sportscar racing in 2007 with the diesel-powered Peugeot 908 HDi FAP. The car won on its debut at the 1000 km of Monza. Stephane Sarrazin took pole at Le Mans in 2007, 2008, and 2009. The team delivered its first Le Mans victory since 1993 in 2009, with David Brabham, Marc Gene, and Alexander Wurz winning. Peugeot scored a 1–2 finish at the 2010 12 Hours of Sebring, but reliability failures across all entries at Le Mans that year allowed Audi to finish 1–2–3. In January 2012, Peugeot Sport announced its withdrawal from sportscar racing, citing reduced vehicle sales and economic pressures.
In November 2019, Peugeot announced its return to endurance racing for the 2022 FIA World Endurance Championship in the newly created Hypercar class. The Peugeot 9X8 used a hybrid powertrain developed with Total, and was notably designed without a rear wing. The driver lineup for 2022 included Loic Duval, Jean-Eric Vergne, Mikkel Jensen, Gustavo Menezes, Paul Di Resta, and Kevin Magnussen. Magnussen departed for Haas F1 ahead of the season, replaced first by James Rossiter and then by Nico Muller. The programme competed under the Peugeot TotalEnergies name following the energy company's title sponsorship. Peugeot earned their first WEC podium finish of the hypercar era at the 2023 6 Hours of Monza.
In a one-off return to Pikes Peak, Peugeot Sport and Sebastien Loeb used the 875 kg, 875 bhp twin-turbocharged 208 T16 in 2013. On 30 June 2013, Loeb demolished the standing record by over a minute and a half, setting a time of 8:13.878 that stood for years as one of the most dominant hillclimb performances in the event's history.