Škoda's motorsport participation traces back to 1901, when Narcis Podsednicek — a mechanic at the Laurin and Klement factory in Mlada Boleslav — completed the Paris–Berlin race on a motorcycle, reportedly the only motorcyclist to finish. Further hill climb successes followed in 1902. From 1905, the company shifted its focus to four-wheeled competition. A notable period came in 1912, when Škoda (then operating as Laurin and Klement) won the Alpine Ride competition for three consecutive years.
Post-war activity included the Škoda 1101 winning the 1000 Miles of Montevideo in 1948, and a crew competing at the 24 Hours of Le Mans in 1950. The Škoda Octavia Touring Sport finished sixth overall and won its class at the 1961 Rallye Monte Carlo.
The 1970s brought the Škoda 130 RS, a car that earned the nickname "Porsche of the East" for its competitiveness relative to its displacement class. Škoda 130 RS cars dominated their category, and in 1981, the brand's drivers won six of eight races in the European Touring Car Championship.
Škoda Motorsport entered the top tier of the WRC in 1999 with the Škoda Octavia WRC, homologated on 1 January 1999. Key drivers during this period included Bruno Thiry, Armin Schwarz, and Toni Gardemeister. The operation partnered with Volkswagen from 1991 and built on factory support when it entered the full WRC campaign.
A successor car, the Škoda Fabia WRC, was presented at the Geneva Motor Show in 2003 and received homologation on 1 July of that year. However, results remained in the mid-field against the dominant Ford, Citroen, and Peugeot factory entries.
From 2009, Škoda Motorsport pivoted away from a top-class factory WRC campaign towards developing customer rally cars for the secondary categories. The Škoda Fabia S2000, homologated at the beginning of 2009, became one of the most successful cars in the Super 2000 class. Sixty-three examples were produced and sold. Per-Gunnar Andersson won in Sweden in the World Championship for Super 2000 cars using the Fabia S2000. Patrik Sandell won two asphalt rounds in the SWRC in Germany and France. Overall, the car accumulated 50 national and international titles worldwide during its competitive life.
The Škoda Fabia Rally2 — homologated in 2015 — succeeded the S2000 car and continued the brand's success. The 2016 WRC2 season brought back-to-back manufacturers' and drivers' titles: the Thiry–Prevot crew won the WRC2 category, while Škoda secured the team title. In 2017, the Tidemand–Andersson crew repeated the drivers' championship feat, and Škoda earned another manufacturers' title. Jan Kopecky and co-driver Dresler won both the WRC2 driver title and the Czech Rally Championship in 2018, along with another manufacturers' title.
The Škoda Fabia Rally2 evo was homologated in April 2019. Its debut in competition came at a Czech Rally Championship event in Cesky Krumlov. Kalle Rovanpera and co-driver Halttunen won the WRC2 Pro category in 2019 — making Rovanpera the youngest world champion in WRC history at that time — with Škoda Motorsport also winning the team title. In 2020 and 2021, Škoda operated through the customer team Toksport WRT, providing factory support to the German outfit in WRC2 while shifting its direct activities increasingly toward development and customer services.
The latest generation car from Škoda Motorsport is the Škoda Fabia RS Rally2, unveiled at a world premiere on 14 June 2022 in Mlada Boleslav. The car features a newly developed 1.6-litre turbocharged engine based on the EA888 TSI engine family, producing approximately 214 kW of power and 430 Nm of torque, driving all four wheels through a sequential five-speed gearbox and two mechanical differentials. The body uses aerodynamics developed as the class-best, with the distinctive Mamba Green livery connecting it to Škoda's RS road car line. Extensive pre-launch testing covered over 10,000 kilometres across asphalt, gravel, and snow surfaces in nine countries. The car's competitive debut came at the German Lausitz Rallye on 5 November 2022, entered by Toksport WRT with Andreas Mikkelsen driving.
Škoda Motorsport's customer programme, launched in 2009, has grown into one of the most extensive in rally sport. By 2020, more than 470 Škoda Fabia Rally2 and Fabia Rally2 evo cars had been sold to teams worldwide. The programme includes spare parts supply, technical support, and optional full servicing packages. In 2019 alone, nineteen customers won national titles and four claimed continental championships. The German team Toksport WRT has been the lead factory-supported customer operation in recent seasons.