Lydden was founded in 1955 by Bill Chesson with the support of the Astra Motor Club. Initially the venue hosted stock-car racing and grass-track motorcycle racing from 1957 onward. By 1962 Chesson had laid a tarmac surface to enable motor and motorcycle road racing, though the circuit was shorter than originally planned after the tarmac ran out at what became known as the Devil's Elbow.
The circuit's place in motorsport history was secured on 4 February 1967, when rallycross was invented at Lydden Hill. The format — combining tarmac and non-tarmac sections in a short, high-intensity sprint race — was conceived by television producer Robert Reed and race organiser Bud Smith, working in cooperation with Chesson. The first ever rallycross race was won by Vic Elford driving a Porsche 911. The sport was designed partly for television, with the short circuits allowing cameras to capture the full action.
James Hunt recorded his first ever race win at Lydden Hill on 9 September 1968, driving a Russell-Alexis Mk14 Formula Ford car. He returned the following year and took his second career win, a footnote in the early career of a driver who would later become Formula One World Champion.
From 1973, Lydden Circuit hosted rounds of the Embassy and ERA European Rallycross Championships and subsequently the FIA European Championship for Rallycross Drivers, with the first 23 such events all organised by the Thames Estuary Automobile Club. Bill Chesson owned and operated the circuit for decades, but disputes with the RAC Motor Sports Association in 1986 over the installation of Armco barriers — which Chesson opposed as a safety risk to motorcycle competitors — led him to put the circuit up for sale. Tom Bissett subsequently purchased it.
From 2008 the new lease holder was Pat Doran, himself a British Rallycross Champion.
The circuit was previously owned by the McLaren Group and is one of only two motor racing circuits in the county of Kent, alongside Brands Hatch. As the shortest road racing circuit in the United Kingdom, Lydden's compact footprint makes it an intimate spectator experience.
On 24 and 25 May 2014, Lydden Hill hosted the second round of the newly formed FIA World Rallycross Championship. The inaugural World RX season brought high-profile entries including Petter Solberg and Liam Doran. Ford Olsbergs MSE driver Andreas Bakkerud won the 2014 event after a near-perfect run, with Robin Larsson second and Britain's Andrew Jordan third in front of his home crowd.
Lydden Hill continued to host the FIA World Rallycross Championship through the 2014 to 2017 seasons. The 2017 event was the last before a gap. In July 2023 the championship was scheduled to return to Lydden Hill for the first time since 2017, but the event was cancelled after a massive fire broke out in the garage on the eve of racing, destroying the Special ONE Lancia Delta RX1e cars and forcing Sebastien Loeb and Guerlain Chicherit to withdraw from the championship.
The American Nitro Rallycross series raced at Lydden Hill to open the 2022-23 season on 18 and 19 June 2022, making Lydden Hill the first track outside North America to host Nitro RX.
Notable rallycross lap records at Lydden include Martin Schanche, driving a Ford RS200 E2, completing 3.5 laps — each measuring 1,400 metres — in 2 minutes 28.8 seconds during the 1990 FIA European Rallycross Championship round. Sverre Isachsen, in a Ford Focus T16 4x4, drove 4 laps in 3 minutes 13.344 seconds during the 2009 FIA European Rallycross Championship round.
Lydden Hill's role as the originating venue of rallycross gives it a unique position in motorsport history. Decades after that first 1967 race, the circuit remains active for British Rallycross Championship rounds and local club events. Its association with the FIA World Rallycross Championship — and with Nitro RX — reflects its continued standing as the spiritual home of the sport it created. The circuit's small size, rural setting in the Kent hills, and near-unbroken history of rallycross events since 1967 make it distinctive among international motorsport venues.