Subaru had participated in the WRC at various intervals since the 1980 Safari Rally, initially through Subaru Rally Team Japan, run by Noriyuki Koseki. Early outings used the Subaru Leone and featured drivers including Ari Vatanen, Per Eklund, and Shekhar Mehta. The best result from this period was a third place for Possum Bourne at the 1987 Rally New Zealand. In September 1989, Subaru Tecnica International president Ryuichiro Kuze forged a formal partnership with Prodrive to create the Subaru World Rally Team, beginning with the Legacy RS.
The Prodrive-developed Group A Legacy RS entered in 1990 with Finnish driver Markku Alén and continued in 1991. For 1992 Subaru contested only seven of the fourteen WRC rounds; Ari Vatanen and Colin McRae each achieved second-place results. The 1993 season brought the team's signature blue and yellow livery and a new title sponsor in State Express 555. McRae took the Legacy RS to its only win at Rally New Zealand before Subaru debuted the Impreza 555 later that season in Finland. Vatanen led the debut rally at one point and secured second place.
The Impreza 555 matured rapidly. Carlos Sainz joined for 1994 and delivered the car's first win at the Acropolis Rally; Colin McRae added wins in New Zealand and Great Britain. In 1995 Sainz and McRae took a combined five wins, including a 1–2–3 finish at Rally Catalunya. The title was decided at the RAC Rally of Great Britain, McRae winning to claim Subaru's first drivers' and manufacturers' championships. Sainz departed to Ford at season's end.
In 1996, with McRae again leading the team alongside Kenneth Eriksson and Piero Liatti, Subaru defended the manufacturers' title. McRae won in Greece, Sanremo, and Catalunya but lost the drivers' championship to Tommi Mäkinen. The team successfully retained the manufacturers' crown for a third consecutive year in 1997, winning eight of the fourteen rallies; McRae lost the drivers' title to Mäkinen by a single point.
Following McRae's departure to Ford, Richard Burns and Juha Kankkunen led the 1999 lineup with a new electronically controlled car featuring paddle-shift gearbox. From the seventh round onward the team was formidable, earning podiums in seven of eight remaining events. Burns won three rallies, Kankkunen two, and Subaru finished second in the manufacturers' standings by four points behind Toyota. Burns again finished second in the drivers' standings in 2000. In 2001 Burns and co-driver Robert Reid won the drivers' championship.
Petter Solberg became the team's lead driver from 2002. He took his first WRC victory at Rally Great Britain in 2002, then achieved the drivers' championship in 2003 with four wins — Cyprus, Australia, France, and Great Britain — beating Sébastien Loeb by a single point. In 2004 and 2005 Solberg was competitive but Subaru could not match the factory Citroën and Peugeot cars, finishing third and fourth in the manufacturers' standings respectively.
From 2006 onward the team struggled with rule changes that banned active differentials and water injection. The season yielded no wins and only four podiums; team boss David Lapworth was replaced mid-season by Paul Howarth. Solberg and Chris Atkinson composed the driver lineup through 2007 and 2008. Atkinson recorded his personal best result of second place in Mexico in 2008. On 16 December 2008 Fuji Heavy Industries, Subaru's parent company, announced the withdrawal from WRC competition, citing the economic downturn and the view that Subaru had achieved its sporting and marketing objectives.
The Subaru World Rally Team's identity became inseparable from the Impreza, a car whose WRC success directly boosted road car sales and popularized Subaru's symmetrical all-wheel-drive technology around the world. The team's three manufacturers' titles (1995, 1996, 1997) and three drivers' titles (Colin McRae 1995, Richard Burns 2001, Petter Solberg 2003) were achieved at a time of intense factory competition, making its record one of the most respected in the championship's history.