The event was born as a six-hour production-car race in 1964 and 1965, both editions won by an Alfa Romeo Giulia entered by Alec Mildren Racing. After a two-year gap it returned in 1968 as a three-hour contest, from then acting as a warm-up for the Bathurst 500 under near-production technical regulations. Canadian driver Allan Moffat drove a Ford XW Falcon GTHO Phase I to victory for the Ford works team in 1969, the first of six Sandown wins he would accumulate across different regulatory eras. The distance shifted to 250 miles from 1970 before settling into the 500 km format that gives the race its modern name after the Sandown circuit was lengthened to 3.9 km in mid-1984.
Group C Touring Car regulations arrived in 1973, and the race quickly became the personal property of Peter Brock. Competing primarily with the Holden Dealer Team, Brock won nine of the twelve Group C races at Sandown, a record that has never been approached. Allan Moffat claimed the other three Group C victories, including two consecutive wins in a Mazda RX-7 in 1982 and 1983 — the first back-to-back wins by a manufacturer other than Ford or Holden since 1965. Moffat's 1982 victory was particularly contentious: he was initially disqualified for a pit lane infringement before being reinstated post-race. Peter Brock and Larry Perkins won the 1984 race in a Holden VK Commodore to close out the Group C era, Brock's ninth and final Sandown triumph.
International Group A regulations replaced Group C in 1985, broadening the manufacturer landscape considerably. Jim Richards and Tony Longhurst won the first Group A Sandown 500 in a BMW 635 CSi, before George Fury and Glenn Seton took the 1986 race in a turbocharged Nissan Skyline — the first time a turbocharged car had won the event. Fury repeated with Terry Shiel in 1987 in another Skyline. Moffat claimed his sixth and final Sandown victory in 1988 in a Ford Sierra RS500 alongside former Grand Prix motorcyclist Gregg Hansford, a win that also proved to be Moffat's last race victory in Australia. Nissan claimed two further wins through Jim Richards and Mark Skaife in 1989 and Glenn Seton with George Fury in 1990. The 1992 race produced one of the era's most memorable finishes when Larry Perkins held off Tony Longhurst in changeable conditions to win his second Sandown in his Group A Holden VL Commodore.
The 5.0-litre touring car regulations that would become V8 Supercars were adopted for the 500 from 1993. Dick Johnson, who had chased the Sandown win for nearly twenty years, finally broke through in 1994 alongside John Bowe, and the pair repeated in 1995. The Holden Racing Team responded with consecutive victories featuring Craig Lowndes and Greg Murphy, including a memorable dice with Glenn Seton in 1997. Larry Perkins won again in 1998 with Russell Ingall before Queensland Raceway displaced Sandown from the calendar in 1999 and 2000.
The race was revived in 2001 in a production-car guise featuring GT-style machinery — John Bowe won in a Ferrari 360, and a Lamborghini Diablo took victory in 2002. V8 Supercars reclaimed the event from 2003, at which point it also became a points-paying championship round. Mark Skaife won a rain-affected 2003 race after Jason Richards beached his car in the final laps while attempting to pass for the lead. Craig Lowndes and Jamie Whincup became the first pairing since Lowndes and Murphy in 1996 to win both the Sandown 500 and the Bathurst 1000 in the same year when they swept the 2007 enduro pairing.
The race moved to Phillip Island from 2008 to 2011, but returned to Sandown in 2012 as the traditional Bathurst warm-up. Triple Eight Race Engineering dominated the early years of the renewed event, winning from 2012 to 2014. From 2016, the Supercars Championship rebranded the Sandown round as a "retro round," with teams running one-off historically inspired liveries. The 2019 running, held unusually in November, was announced as the last Sandown 500 before a planned replacement at The Bend Motorsport Park, but pandemic disruption shelved that scheme. After a three-year absence the event was reinstated for 2023, when Jamie Whincup won for a record sixth time at the circuit.
The Sandown 500 occupies a central place in Australian touring car history as the race most associated with Peter Brock's endurance dominance and as the circuit where Allan Moffat's career effectively ended in triumph. Its role as the annual prelude to the Bathurst 1000 gives it a significance beyond its standalone result, functioning as an early pointer to which teams and co-driver pairings carry genuine Bathurst pace. Multiple winner records include Brock's nine Group C victories, Lowndes's six wins across four different regulatory eras, and Moffat's six wins spread across production-car, Group C, and Group A competition.