The Celica GT-Four lineage began in 1986 as Japan's answer to the four-wheel-drive turbocharged era of rally competition. Toyota's Tahara plant produced the road cars while Toyota Team Europe (TTE) in Cologne, Germany, prepared the competition versions. The ST205 followed the ST165 and the highly successful ST185, which had delivered WRC Manufacturers' and Drivers' championships in 1993 and 1994 under drivers Carlos Sainz, Juha Kankkunen, and Didier Auriol.
The ST205 was launched in Japan in February 1994 and reached Australian, European, and British markets mid-year. It featured an extensively revised 3S-GTE engine producing between 242 PS for export versions and 255 PS for the Japanese market, mated to the E154F gearbox. Significant engineering changes included an all-aluminium bonnet to reduce weight, an improved CT20B twin-entry turbocharger, four-channel ABS, and a new "Super Strut Suspension" system that attracted considerable attention from enthusiasts and engineers alike.
To qualify the ST205 as a Group A rally car, Toyota built 2,500 homologation examples, known as the GT-Four WRC. These cars included specific components to allow conversion to full competition specification: pre-plumbed anti-lag system pipework, a water spray bar and pump for the front intercooler, a basic water injection system, insulation between the engine and charge cooler, and elevated rear spoiler mountings. Of the 2,500 units, 2,100 remained in Japan, 300 went to Europe, 77 to Australia, and 5 to New Zealand. All 77 Australian-spec cars featured leather interiors and numbered plaques mounted ahead of the gear lever.
The road car's Super Strut Suspension was not carried over to the actual competition cars, as TTE found the wear rates too high under rally conditions and reverted to conventional strut suspension for racing use.
The ST205 entered WRC competition in 1995 as TTE's official challenger, but the season ended in disaster. During the Rally Catalunya, officials discovered that TTE had fitted illegal turbo restrictor bypass devices to gain a power advantage. FIA president Max Mosley described the device as "the most sophisticated I've ever seen in 30 years of motor sports." Toyota and their three drivers — Juha Kankkunen, Didier Auriol, and Armin Schwarz — were disqualified from the championships, with Kankkunen having been leading the Drivers' Championship heading into that event. TTE was banned from WRC for the entire 1996 season.
Despite the ban, ST205s continued to compete in 1996 and 1997 run by private teams, most notably the Italian outfit HF Grifone and various national Toyota importers. The car managed one official WRC overall victory from its time with TTE before the scandal. In 1996, the ST205 won the European Rally Championship. It also took the Manx International Rally that year, driven by Armin Schwarz and co-driver Denis Giraudet for Toyota Castrol Team. TTE had also been the first team to introduce the anti-lag system in Group A competition, a technical breakthrough later widely adopted across the sport.
Despite its short and troubled WRC tenure with TTE, statistical analysis showed the ST205 achieved the highest podium percentage (25.6%) and the most victories relative to the number of starters of any Group A car it competed against.
The ST205 production line continued until 1999, receiving a facelift in August 1995 with new six-spoke alloys, restyled side skirts, and a redesigned rear spoiler. Japanese models received updated rear lamp clusters. A second update in December 1997 brought back the high WRC-style rear spoiler, projector headlights, and a three-spoke leather steering wheel with airbag. Sport ABS and dual airbags became standard on all cars from August 1996.
The ST205 closed the Celica GT-Four chapter on a complicated note. Though the car's WRC career with TTE was abbreviated by the restrictor scandal, the ST205 consolidated an era in which Toyota proved that Japanese manufacturers could compete at the highest level of world rallying, preceding Mitsubishi and Subaru in their WRC title campaigns. Toyota would not return to the WRC until 2017, more than a decade after the Celica road car was discontinued. TTE's pioneering use of the anti-lag system on the ST205 left a lasting mark on rally engineering that extended well beyond the car's competitive lifespan.