Rallye Monte Carlo is the most famous event of the year and symbolizes this sport for many years. Its history can be traced back to the year 1909 when the Automobile Club de Monaco (Sport Automobile Velocipedique Monegasque) started planning a car rally at the behest of Albert I, Prince of Monaco. The Monte Carlo Rally was intended to start at points all over Europe and converge on Monte Carlo. In January 1911 twenty three cars set out from 11 different locations and Henri Rougier was among the nine who left Paris to cover a 1,020 kilometres (634 miles) route which he did at the time of a little more than 28 hours. The event was won by Rougier in a Turcat-Méry 25 Hp and the rally comprised both driving and then somewhat arbitrary judging based on the elegance of the car, passenger comfort and the condition in which it arrived in the principality. The outcry of scandal when the results were published changed nothing, so Rougier was proclaimed the first winner. All following events were judged in a very similar way and the evaluation committee has always had more sympathy for the French crews then the others. Last event before World War II in 1914 included a special section to the top of the Col du Braus, where the speed of cars were measured. To compete in Monte Carlo became very quickly a matter of prestige and for the completion of this rally it was often necessary to overcome piles of snow in the Mediterranean section of the Alps.

Its top competition in terms of number of participants achieved the rally in 1953 when total of 440 crews appeared at the start of this event. The 1966 event was the most controversial in the history of the rally. The first four finishers, driving three Mini-Coopers and Roger Clark's 4th placed Ford Cortina were excluded for having iodine vapour, single filament bulbs in their standard headlamps instead of double-filament dipping bulbs. This elevated Pauli Toivonen with his Citroën ID into first place overall. Rosemary Smith was also disqualified from sixth place after winning the Coupe des Dames. At the end total of ten cars were disqualified. The controversy that followed damaged the credibility of the event and the Motor Sport magazine called it "The Monte Carlo Fiasco."

In 1973 the first rally of the newly established World Rally Championship was held in Monte Carlo and the Renault Alpine A110 was able to get on all three spots on the podium. In the following years the competition has become several times a pray of Lancia Stratos and Lancia continued its successes more or less continuously until 1990 when it was for the fourth consecutive year won by Lancia Delta Integrale. In 1991 for the first time a Japanese manufacturer won the event with Toyota Celica GT Four and worth mentioning is also Tommi Makinen´s string of victories from 1999 to 2002. The most successful driver is currently Sebastien Loeb, who won the Rallye Monte Carlo seven times.

With often varying conditions at each starting point typically comprising dry tarmac, wet tarmac, snow, and ice, sometimes all in a single stage of the rally, this event places a big emphasis on tyre choices, as a driver has to balance the need for grip on ice and snow with the need for grip on dry tarmac. For the driver, this is often a difficult choice as the tyres that work well on snow and ice normally perform badly on dry tarmac. In terms of tyre choice it is probably one of the toughest rallies and a clear advantage here have local experts of the surface as it was demonstrated on several occasions by François Delecour. Only twice in the postwar period the competition did not placed. It was cancelled due to the worldwide oil crisis in the year 1957 and 1974.

Rally Monte Carlo features one of the most famous special stages in the world named Col de Turini. The stage runs from La Bollène-Vésubie to Sospel or the other way round over a steep and tight mountain road with many hairpin turns. On his route it passes over the Col de Turini, a mountain pass road which is normally covered by ice and snow at that time of the year and if not spectators throw some snow on the road instead. In 2005 Marcus Grönholm and Petter Solberg both ripped a wheel off their cars when they skidded on snow placed there by spectators and crashed into a wall. Passage through the Col de Turini is very difficult in itself because the car which previously steeply climbed up feels on the flat pass suddenly light and even experienced drivers are often simply "too fast". Adding the atmosphere of roaring spectators, low walls around the track and a lot of cameras whose lightning almost continuously accompany the passage of the car it sometimes starts to be very uncomfortable for the drivers to get car under control. The Col de Turini is mostly driven at night with thousands of fans watching the "Night of the Long Knives" as it is called due to the strong high beam lights cutting through the night.