William Kissam Vanderbilt II established the cup and put up a substantial cash prize, hoping to encourage American manufacturers to compete seriously with the dominant European racing establishments. The inaugural race on 8 October 1904 was held on a 30.24-mile course of winding dirt roads in Nassau County, Long Island, New York. Controversy and legal challenges preceded the event, but Vanderbilt prevailed. Seventeen vehicles contested the first running; George Heath won in a French Panhard. French cars — a Darracq — took the victory in the following two years as well, reflecting the technological lead of European manufacturers.
A spectator named Curt Gruner was killed in 1906, and the race was cancelled. Vanderbilt responded by forming a company to build the Long Island Motor Parkway, one of America's first modern paved highways, which could serve both as a race venue and as a public toll road. The 1908 race incorporated sections of the new highway, and 23-year-old George Robertson from Garden City became the first American to win the event, driving an American Locomobile — the first United States-built car to win in international competition.
The race continued on Long Island through 1910, attracting leading European drivers and making the Cup one of the most prestigious prizes in early motor sport. Among those who competed were Louis Chevrolet, Vincenzo Lancia, and Ralph DePalma, names that would become synonymous with the development of the automobile industry.
From 1911 onwards the Vanderbilt Cup was held at a series of different venues. In 1911 it moved to Savannah, Georgia, where it was combined with the American Grand Prize. In 1912 the race relocated to Milwaukee, Wisconsin, and from 1914 to 1916 it was held in California — at Santa Monica in 1914 and 1916, and in San Francisco in 1915. The race was cancelled in 1917 after the United States entered the First World War and was not revived until the late 1930s.
After a hiatus of nearly two decades, William Kissam Vanderbilt II's nephew George Washington Vanderbilt III sponsored a return of the cup in 1936 at the newly constructed Roosevelt Raceway in New York. The prize money was large enough to attract European factory entries: Scuderia Ferrari brought three Alfa Romeo racers. The lack of competitive American opposition and a course layout that produced few overtaking opportunities drew criticism from observers. Both the 1936 and 1937 editions were won by European drivers. The race was not held again, and the pre-war chapter of the Vanderbilt Cup closed with two largely one-sided European victories.
Despite its irregular scheduling and inconsistent venues, the Vanderbilt Cup left a significant mark on American motorsport culture. It introduced American audiences to the spectacle of international Grand Prix racing at a time when the automobile itself was still a novelty, and its original Long Island editions helped establish road racing as a serious sport in the United States. The original silver trophy, standing 2.5 feet tall and bearing an image of Vanderbilt himself at the wheel of his Mercedes at the Daytona Beach Road Course, is today held in storage at the Smithsonian Institution.