The organisation began as Andersson Motorsport in Sweden, established by Ove Andersson to support his own racing career. Andersson's relationship with Toyota started in 1972 when he drove a Toyota Celica in the RAC Rally. From 1973 the company took on responsibility for Toyota's works entries in the newly established World Rally Championship, competing under the Toyota Team Europe (TTE) banner. The operation relocated to Brussels in 1975 and then to Cologne in 1979, where it was incorporated as Andersson Motorsport GmbH.
In 1993, Toyota Motor Corporation acquired Andersson Motorsport GmbH and renamed it Toyota Motorsport GmbH. With Andersson remaining as team manager for TTE, the facility employed 300 staff from 17 nations.
TTE's rally campaigns produced multiple World Championship titles. Carlos Sainz won the Drivers' Championship in 1990 and 1992 using the Celica ST165 and ST185. Juha Kankkunen won the Drivers' title in 1993 and Didier Auriol in 1994, with the ST185 also taking Manufacturers' titles in 1993 and 1994. A major setback came in 1995 when TTE received a 12-month ban from the WRC after designing an illegal air restrictor on the ST205 to conceal a bypass mechanism from scrutineers. Toyota withdrew from rallying entirely at the end of 1999 to direct TMG's resources toward Formula One.
TMG entered the 24 Hours of Le Mans in 1998 and 1999 with the Toyota GT-One, a GT1-class prototype. The 1998 campaign ended in disappointment, with one car retiring after a high-speed accident and the others unable to threaten the overall lead. In 1999, tyre failures eliminated two cars early, but the surviving No. 3 GT-One finished second overall after a dramatic late push by Ukyo Katayama, only for a tyre blowout to end hopes of overall victory. The result remained second place — a strong showing but short of the overall win that would have made Toyota only the second Japanese manufacturer to take Le Mans outright.
From 2002 to 2009, TMG operated Toyota's Formula One programme under the Panasonic Toyota Racing banner, starting 139 Grands Prix. The team earned 13 podium finishes, three pole positions, and 278.5 championship points over eight seasons but never won a Grand Prix. TMG also supplied Toyota F1 engines to the Jordan team in 2005, to its successor Midland F1 Racing in 2006, and to Williams from 2007 to 2009. Toyota announced its withdrawal from Formula One on 4 November 2009.
TMG re-entered sports car competition in 2012 with the Toyota TS030 Hybrid in the World Endurance Championship, and Toyota subsequently achieved sustained success in WEC with the TS040 Hybrid, TS050 Hybrid, and GR010 Hybrid, eventually winning multiple 24 Hours of Le Mans overall victories. A planned return to the WRC materialised in 2017, though engine development remained TMG's primary contribution while Tommi Mäkinen Racing built and ran the car from Finland.
TMG was renamed Toyota Gazoo Racing Europe in April 2020, reflecting Toyota's Gazoo Racing brand umbrella. Following Toyota's broader brand consolidation announced in January 2026, TGR-E is transitioning to the name Toyota Racing.