The organisation traces its roots to Andersson Motorsport, established in Sweden by rally driver Ove Andersson. His relationship with Toyota began in 1972 when he was offered a Toyota Celica for the RAC Rally. From 1973, Andersson Motorsport took responsibility for Toyota's works entries in the then-new World Rally Championship, competing as Toyota Team Europe (TTE). In 1975, the team and its operations moved to Brussels, Belgium, and in 1979 relocated to Cologne, Germany, where it was incorporated as Andersson Motorsport GmbH.
In 1993, Toyota Motor Corporation purchased Andersson Motorsport GmbH and renamed it Toyota Motorsport GmbH (TMG). At the time, TMG employed 300 staff from 17 nations, with Ove Andersson remaining as team manager of TTE.
Toyota Team Europe's first rally win came in August 1975 when Hannu Mikkola won the 1000 Lakes Rally in a Corolla 1600. The team made significant advances with the introduction of four-wheel drive in 1987, revealed via the Toyota Celica GT-Four driven by Juha Kankkunen and Kenneth Eriksson. Carlos Sainz won the 1990 FIA World Rally Championship Drivers' title with the ST165 and repeated the feat in 1992 with the ST185. The ST185 also delivered the WRC Drivers' and Manufacturers' titles in 1993 with Kankkunen and in 1994 with Didier Auriol. In 1995, TTE was banned from the WRC for 12 months after designing an illegal air restrictor on the ST205 that incorporated bypass and spring-loaded concealment mechanisms. Toyota withdrew from rallying at the end of 1999 to focus on Formula One.
In 1998 and 1999, TMG entered the 24 Hours of Le Mans with the Toyota GT-One. The 1998 entry saw the car qualify strongly but lose its highest-placed runner to a gearbox failure in the closing hours, with the remaining car finishing ninth. The 1999 campaign was equally dramatic: multiple Michelin tyre failures eliminated two cars, but the remaining GT-One driven by Ukyo Katayama recovered to finish second overall — Toyota's best Le Mans result to that point. The GT-One raced once more at the 1999 Le Mans Fuji 1000km, where it again finished second. The programme ended as TMG pivoted to Formula One.
From 2002 to 2009, TMG operated Toyota's Formula One team, Panasonic Toyota Racing, starting 139 Grands Prix. The team accumulated 278.5 championship points across that period, recording 13 podium finishes and three pole positions. TMG also supplied Toyota F1 engines to Jordan/Midland in 2005–2006 and to the Williams F1 team from 2007 to 2009. On 4 November 2009, Toyota announced its withdrawal from Formula One.
TMG returned to sportscar competition in 2011 as an engine supplier to Lola Cars for Rebellion Racing, then re-entered as a full constructor in 2012 with the Toyota TS030 Hybrid in the inaugural FIA World Endurance Championship season. The TS030's Le Mans debut was marred by a crash that fractured Anthony Davidson's two vertebrae and an engine failure that eliminated the sister car. A revised TS030 achieved a second-place finish at the 2013 Le Mans, with Stéphane Sarrazin, Anthony Davidson, and Sébastien Buemi.
Successive generations — the TS040 Hybrid (2014, using a 3.7-litre V8 with regenerative braking at both axles) and the TS050 Hybrid (from 2016, powered by a 2.4-litre V6 twin-turbo) — brought Toyota to outright Le Mans victories, with the GR010 Hybrid completing the programme under the Le Mans Hypercar regulations from 2021.
In 2015, Toyota announced a return to the WRC for 2017. TMG handled engine development for a new Yaris WRC while chassis development and team operations were assigned to Tommi Mäkinen Racing Oy in Finland. When Toyota acquired TMR in 2021, it was renamed Toyota Gazoo Racing World Rally Team Oy and became a subsidiary of TGR-E.
TMG was renamed Toyota Gazoo Racing Europe GmbH (TGR-E) in April 2020. TGR-E assumed direct management of the WRC programme in 2021. In January 2026, Toyota announced that TGR-E would be renamed Toyota Racing, with the transition to be completed by January 2027.