The 205 GTI arrived in 1984 as a 1.6-litre, in-line four cylinder configuration, and then in 1986 with a 1.9-litre less ‘revvy’ but more ‘torquey’ engine. It is considered to be among the most popular hot hatches ever. In the hands of a skilled driver, these cars offer a very rewarding driving experience. The 205 GTI was certainly one of the first front wheel drive cars said by many motoring experts to be as rewarding to drive hard as an equivalent rear-wheel drive car.

The 1.6 GTI initially produced 105bhp, but in 1987 the engine received the cylinder head with larger valves from the 1.9 GTI, increasing output to 115bhp. The 1.9 GTI engine produced 126-130bhp. Outside the engine bay, the main differences between the 1.6 GTI and the 1.9 GTI are half-leather seats; disc brakes all-round and larger 15 inch alloys.

The 205 is still mentioned to this day in group car tests of the newest GTI models or equivalent.

A cabriolet version of the 205 was designed and partially assembled by Pininfarina of Italy. The CTI version had the same plastic arches and wheels as the 1.6 GTI, and some later models incorporated the catalyzed 1.9-litre engine.

The main aesthetic difference between the GTI/CTI versions and other 205 models were the plastic wheel arches and trim, and beefier front and rear bumper valances. The shell also underwent some minor changes, including larger wheel arches, and the suspension was redesigned and sat lower on the GTI with stiffer springs, different wishbones and a drop-linked anti-roll bar.

Many 205 enthusiasts pride themselves in either complete and detailed restorations or enhancing even further the performance of this already nimble, classic and influential car.

A common modification for fast road/track use is to transplant a 16-Valve engine as used in the Citroen BX 19 GTI 16V, the Peugeot 405 Mi16, the 306 S16 or the more modern 306 GTI6. The BX 16V/Mi16 engine is a development of the 205 T16 rally-bred engine; the essential difference being the 16-Valve double overhead camshaft cylinder head. These engines will fit into the Peugeot 205’s engine bay with little to no modification. The associated weight gains are negligible, and the gain of between 30 to an amazing 100bhp is startling (and thoroughly enjoyable) in so light a car. Turbo-charging and even supercharging either the 8-Valve or 16-Valve engines is another route to increasing power, and the many different methods used means that no two 205s with performance enhancements are likely to be the same.

There is a thriving market for companies supporting the 205 passion, that produce up-rated suspension systems, after-market electronic control units (ECUs) and performance engine components such as camshafts, exhaust systems and throttle bodies. It's also not unknown for some engines to have their displacements increased, from 1.9 & 2.0-litre to nearly 2.5-litres, which makes for a quite staggering change in performance when the car weighs less than 900kg

Peugeot also produced some limited edition 205 GTI models over the car's life. In 1990, 1,200 GTIs were made in new colours (then) of Miami Blue and Sorrento Green (a very dark metallic green). The cars were made in an equal mix of 300 blue 1.6, 300 green 1.6, 300 blue 1.9 and 300 green 1.9. The cars had power steering and a full, grey leather interior as standard, together with grey carpets.

The Gentry was a limited edition with an all-leather interior, a 105bhp 1.9-litre engine, automatic transmission and some other extras. Gentries typically came in Sorrento Green.

The Griffe was a special GTI edition for mainland Europe and was sold in France, Germany and the Netherlands. It was bright (Laser) green and came equipped with all available vendor options at that time except air-conditioning, but did include a full, black leather interior, ABS, power-steering and a sunroof. Approximately 3,000 Griffes were made.

From 1988 to 1992 Peugeot produced another variant called the 205 Rallye, which was positioned as a cost effective alternative to the 205 GTI. It retained the GTI’s sporty character but was less expensive to buy and maintain. The Rallye engine was based on the 1.1-litre, but with cylinders bored out to give 1294 cc. It also utilized a sports camshaft and twin Weber carburetors. While only a 1.3-litre engine, it still produced 102bhp at 6,800 rpm. The car got the 1.9 GTI front suspension with ventilated brake discs, and the 1.6 GTI rear axle.

The Rallye was stripped of almost all soundproofing, electrical systems and other luxury items, bringing down the weight to no more than 794 kg (1,750 lb). Its minimalistic equipment together with the high revs needed to unleash all of the engine's horsepower, gives the 205 Rallye a very spartan character and makes it a difficult but rewarding car to drive hard, which is one of the reasons it is now very popular among 205 GTI enthusiasts. Around 30,000 Rallyes were produced.

There were also the Roland Garros cabriolets and hard tops, all with a 1.4-litre 85bhp engine, alloy wheels, half-white leather seats, electric windows and central locking.

During 1991, the 205 range accounted for over 3% of all UK registrations, and was the nation's eighth best selling new car. In 1994 the last 205 GTI rolled off production lines.