Toyota's earliest WRC activity came through Toyota Team Europe, which campaigned Group B and Group A Celicas in the 1980s and then the Toyota Corolla World Rally Car into the 1990s. The programme concluded at the end of the 1999 season, when Toyota withdrew to focus on its Formula One engine project.
In January 2015, Toyota officially announced a WRC comeback for 2017. Development of the Yaris WRC was initially assigned to Toyota Motorsport GmbH in Germany, the same organisation that had managed Toyota Team Europe. In July 2015, however, Toyota president Akio Toyoda reassigned the project to Finnish former champion Tommi Mäkinen, who established the team in his home country. Only the engine continued to be built by the German facility. New World Rally Car regulations due in 2017 required an entirely fresh design approach.
Toyota Gazoo Racing consolidated all of Toyota's motorsport activities under one banner in 2015, with Toyota Motorsport GmbH renamed Toyota Gazoo Racing Europe. The WRC team operates as a separate operational unit from the Toyota Gazoo Racing squad that competes in the World Endurance Championship, though both sit within Toyota Gazoo Racing Europe.
The team made its WRC return in the 2017 season with the Toyota Yaris WRC. Following Volkswagen's withdrawal from the sport, Jari-Matti Latvala and co-driver Miikka Anttila joined alongside Juho Hänninen and co-driver Kaj Lindström. Esapekka Lappi and Janne Ferm contested a partial campaign. Toyota took its first WRC win on the return at Rally Sweden in 2017. Lappi added a further victory at Rally Finland, and the team finished the season third in the manufacturers' standings.
For 2018 Ott Tänak and Martin Järveoja joined from M-Sport, and the team relocated its service base to a new facility near Tallinn, Estonia. Tänak took four wins including three consecutive victories, and Toyota claimed the 2018 manufacturers' title — the brand's first since 1999. Team principal Mäkinen became the first person in WRC history to win titles both as a driver and as a team principal.
In 2019 Tänak and Järveoja won the drivers' and co-drivers' championships, though Toyota finished runners-up in the manufacturers' standings behind Hyundai. For 2020, Sébastien Ogier joined from Citroën alongside Elfyn Evans and Kalle Rovanperä. Despite the COVID-19 pandemic reducing the season to seven rounds, Ogier and Julian Ingrassia emerged as champions. Toyota again finished runners-up to Hyundai. In September 2020 Toyota Gazoo Racing completed the purchase of the team from Tommi Mäkinen Racing; Mäkinen stepped down as team principal and became a motorsports advisor.
In 2021, Jari-Matti Latvala assumed the team principal role. Ogier and Ingrassia won their eighth respective world titles, then retired from full-time competition. Toyota won nine of twelve events and secured both the manufacturers' title and the drivers' title — completing a championship double. The Estonia service base closed at season's end with all operations consolidated in Jyväskylä.
New technical regulations for 2022 mandated a tubular spaceframe chassis and a hybrid powertrain. Toyota responded with the GR Yaris Rally1 Hybrid. Kalle Rovanperä and Jonne Halttunen recorded six wins and clinched the drivers' and co-drivers' championships. Rovanperä, who had already become the youngest winner of a WRC round in 2021, became the youngest world champion in WRC history, eclipsing Colin McRae's previous record by almost five years. Toyota successfully defended the manufacturers' title, notably recording a 1–2–3–4 finish at Safari Rally Kenya.
In 2023 Ogier returned to the team on a part-time basis alongside Elfyn Evans, Takamoto Katsuta, and Rovanperä. Ogier took the outright record for wins at Rallye Monte Carlo, surpassing Sébastien Loeb. Toyota secured a third consecutive manufacturers' championship. Rovanperä and Halttunen also defended their drivers' title. Rovanperä announced after the season that he would compete part-time in 2024, with a return to full-time planned for 2025.
In 2024 Toyota ceded the drivers' title to Hyundai's Thierry Neuville but won the manufacturers' championship by three points at Rally Japan. The team also introduced the Toyota GR Yaris Rally2 for WRC2 competition, with Sami Pajari and Enni Mälkonen winning the WRC2 Drivers' Championship.
The TGR WRC Challenge Program was established in 2015 to identify and develop talented young Japanese drivers. The programme's first and only graduate to reach the manufacturer team in the WRC's top class is Takamoto Katsuta. Subsequent generations of the programme have included drivers competing in Rally2 and Rally4 categories at Finnish and European events.