Prost Grand Prix was formed when Alain Prost purchased the Ligier operation in 1997. The AP01's drivers for 1998 were Olivier Panis — who was in his fifth season with the team including its years as Ligier — and Jarno Trulli, who was making his first full season with Prost after having stood in for the injured Panis for several races during 1997.
The car was designed around the Peugeot A16 V10 engine, the first season of a direct factory works arrangement with the French manufacturer. This partnership came with engine supply, direct technical support and official factory backing — a significant step up from the customer status the team had held in previous years.
The 1998 season was difficult for Prost. The AP01's most significant weakness was the Peugeot engine, which was both unreliable and heavier than the team had anticipated. The weight of the unit compromised the car's balance by limiting the team's ability to position ballast freely, a disadvantage that became particularly acute as rivals exploited greater flexibility in weight distribution. Jarno Trulli was first to identify the handling imbalance at the rear of the car. The AP01 also required three attempts to pass the mandatory FIA crash test before the season could begin.
The team also relocated its factory to a site nearer Paris during 1998, creating an organisational disruption that added to the technical challenges. A major overhaul was conducted before the Canadian Grand Prix, including a complete revision of the rear suspension.
The sole championship point of the season came at the 1998 Belgian Grand Prix at Spa-Francorchamps, scored by Trulli who finished sixth. The race was chaotic — only eight cars were classified as finishers — and Trulli managed sixth despite losing an entire lap to the leaders in the final six laps because of engine problems. The point placed Prost ninth in the Constructors' Championship.
For the opening races of the season, the AP01 ran X-wing aerodynamic devices above the sidepods, a configuration that several teams experimented with before the FIA banned the devices after the San Marino Grand Prix on safety grounds.
A modified variant, the AP01B, was prepared during the season with a revised gearbox, a refurbished engine specification and reduced weight on the rear axle. The AP01B was tested by both Panis and Trulli at Magny-Cours and Barcelona in October. Trulli was given the AP01B for the Japanese Grand Prix, the decision made by coin toss rather than any preference for either driver. After qualifying 14th, Trulli requested permission to revert to the older specification, which was refused by the team. The AP01B was then damaged in a warm-up accident and was not repaired in time to start the race.
The AP01 carried a dark blue base livery with black and white accents on the wings. The primary commercial partner was the French cigarette brand Gauloises, whose logo appeared on the rear wing, airbox and front wing. Peugeot and fuel supplier Total were identified on the sidepods. Sony advertised the PlayStation on the car's flanks. Other partners included 3M, Alcatel, BIC Group and Canal+. At the French, British and German Grands Prix, tobacco advertising restrictions required the Gauloises branding to be replaced by white dashes.
The AP01 represented a transitional phase for Prost Grand Prix. The works Peugeot engine deal was a statement of intent, but the partnership's first year produced only a single championship point. The team would continue with Peugeot into 1999 before eventually securing a works deal with Ferrari for 2001. Prost Grand Prix entered administration in 2002 and did not complete that season.