The circuit at Hockenheim was built in 1939 by Mercedes-Benz, which wanted somewhere to test its cars for the high-speed Tripoli Grand Prix. The result was a massive sausage-shaped circuit running through the flat woodland close to the Rhine River. It was 4.8 miles in length and consisted of two long curling straights with a curve at either end. The western end of the track ran close to the village of Hockenheim and looped around the town cemetery.

The track's development stopped before it had really began as war broke out and in the post-war era the Nurburgring was the main venue for racing in West Germany. Hockenheim hosted only a few minor events. The boom in the German economy in the late 1950s resulted in investment in new roads and in the early 1960s a new autobahn was planned which cut through the old circuit. It was then owned by the town and the German government agreed to pay compensation and the money raised was used to upgrade the track. The Germans engaged Dutch circuit designer John Hugenholz and he came up with the modern Hockenheim, 4.2 miles in length, including the twisty "Stadium" section - around which vast colorful grandstands were erected.

Racing restarted in 1966 but it was not until April 1968 that Hockenheim hit the headlines, for all the wrong reasons, when Jim Clark was killed in an unexplained accident out in the woods during a Formula 2 race.

Formula 1 went to Hockenheim in 1970 because the old Nurburgring was no longer safe enough. Jochen Rindt won the first German GP at Hockenheim but once the Nurburgring had been upgraded the race went back, leaving Hockenheim to hold Formula 2 and German national races.

Niki Lauda's accident at the Nurburgring in 1976 ended the track's Formula 1 history and as Hockenheim was the only choice it became the new home of the German GP. Lauda won the first race in 1977 while Mario Andretti dominated for Team Lotus in 1978 and Alan Jones for Williams in 1979. In 1980 Patrick Depailler was killed while testing at the track and a chicane was built at the previously-challenging Ostkurve. In 1982 Didier Pironi suffered terrible leg injuries when he failed to see another car in a cloud of spray and crashed over it, cartwheeling down the track in his Ferrari. Patrick Tambay gave the Ferrari team a much-needed boost that weekend with a victory.

The rise to fame of Michael Schumacher transformed Hockenheim into a huge loud party every year, notably in 1995 when he won the race but the circuit's small crowd capacity and the increasing costs of holding the race meant that by 2000 Hockenheim was planning a major rebuild, despite opposition from the local environmentalists. The reconstruction of the the circuit changed the character of the circuit completely but it was judged to be a success when the F 1teams visited for the first time in 2002.