Although horse racing is one of the oldest of all sports, its basic concept has undergone virtually no change over the centuries. It has developed from a primitive contest of speed or stamina between two horses into a spectacle involving large fields of runners, sophisticated electronic monitoring equipment, and immense sums of money, but its essential feature has always been the same: the horse that finishes first is the winner. In the modern era horse racing developed from a diversion of the leisure class into a huge public-entertainment business. Derby Day at Epsom, England, where the public is admitted onto parts of the grounds at no fee, has drawn as many as 500,000 spectators. Attendance at both flat and harness racing in many countries is the highest or among the highest of all sports.

Knowledge of the first horse race is lost in prehistory. Both four-hitch chariot and mounted (bareback) races were held in the Olympic Games of Greece over the period 700–40 BC. Horse racing, both of chariots and of mounted riders, was a well-organized public entertainment in the Roman Empire. The history of organized racing in other ancient civilizations is not very firmly established. Presumably, organized racing began in such countries as China, Persia, Arabia, and other countries of the Middle East and of North Africa, where horsemanship early became highly developed. Thence came too the Arabian, Barb, and Turk horses that contributed to the earliest European racing. Such horses became familiar to Europeans during the Crusades (11th to 13th century AD), from which they brought those horses back.

Racing in medieval England began when horses for sale were ridden in competition by professional riders to display the horses' speed to buyers. During the reign of Richard the Lion-Heart (1189–99), the first known racing purse was offered, £40, for a race run over a 3-mile (4.8-km) course with knights as riders. In the 16th century Henry VIII imported horses from Italy and Spain (presumably Barbs) and established studs at several locations. In the 17th century James I sponsored meetings in England. His successor, Charles I, had a stud of 139 horses when he died in 1649.

In North America Richard Nicolls (Nicolls, Richard), governor of the colony of New York, in 1665 offered a silver cup, the first known North American racing trophy, to be run for at Hampstead Plain, Long Island. Thus began course racing in North America.

In France the first documented horse race was held in 1651 as the result of a wager between two noblemen. During the reign of Louis XIV (1643–1715), racing based on gambling was prevalent. Louis XVI (reigned 1774–93) organized a jockey club and established rules of racing by royal decree that included requiring certificates of origin for horses and imposing extra weight on foreign horses.

The earliest races were match races between two horses, or at most three, the owners providing the purse, a simple wager. An owner who withdrew commonly forfeited half the purse, later the whole purse, and bets also came under the same “play or pay” rule. Agreements were recorded by disinterested third parties, who came to be called keepers of the match book. One such keeper at Newmarket, John Cheny, began publishing Cheny's Horse Matches (1727), a consolidation of match books at various racing centres; and this work was continued annually with varying titles, until in 1773 James Weatherby established it as the Racing Calendar, continued thereafter by his family.

By the mid-18th century, the demand for more public racing had produced open events with larger fields of runners. Eligibility rules were developed based on the age, sex, birthplace, and previous performance of horses and the qualifications of riders. Races were created in which owners were the riders (gentlemen riders); in which the field was restricted geographically to a township or county; and in which only horses that had not won more than a certain amount were entered. An act of the British Parliament of 1740 provided that horses entered had to be the bona fide property of the owners, thus preventing “ringers,” a superior horse entered fraudulently against inferior horses; horses had to be certified as to age; and there were penalties for rough riding.

Contemporary accounts identified riders (in England called jockeys—if professional—from the second half of the 17th century and later in French racing), but their names were not at first officially recorded. Only the names of winning trainers and riders were at first recorded in the Racing Calendar, but by the late 1850s all were named. This neglect of the riders is partly explained in that when races consisted of 4-mile heats, with two heats won needed for victory, the individual rider's judgment and skill were not so vital. As dash racing (one heat) became the rule, a few yards in a race gained importance, and consequently so did the rider's skill and judgment in coaxing that advantage from his mount.

All horse racing on the flat except quarter-horse racing involves Thoroughbred horses. Thoroughbreds evolved from a mixture of Arab, Turk, and Barb horses with native English stock. Private studbooks had existed from the early 17th century, but they were not invariably reliable. In 1791 Weatherby published An Introduction to a General Stud Book, the pedigrees being based on earlier Racing Calendars and sales papers. After a few years of revision, it was updated annually. All Thoroughbreds are said to descend from three “Oriental” stallions (the Darley Arabian, the Godolphin Barb, and the Byerly Turk, all brought to Great Britain, 1690–1730) and from 43 “royal” mares (those imported by Charles II). The preeminence of English racing and hence of the General Stud Book from 1791 provided a standard for judging a horse's breeding (and thereby, at least to some degree, its racing qualities). In France the Stud Book Française (beginning in 1838) originally included two classifications: Orientale (Arab, Turk, and Barb) and Anglais (mixtures according to the English pattern), but these were later reduced to one class chevaux de pur sang Anglais (“horses of pure English blood”). The American Stud Book dates from 1897 and includes foals from Canada, Puerto Rico, and parts of Mexico, as well as from the United States.

The longstanding reciprocity among studbooks of various countries was broken in 1913 by the Jersey Act passed by the English Jockey Club, which disqualified many Thoroughbred horses bred outside England or Ireland. The purpose of the act was ostensibly to protect the British Thoroughbred from infusions of North American (mainly U.S.) sprinting blood. After a rash of victories in prestigious English races by French horses with “tainted” American ancestry in the 1940s, the Jersey Act was rescinded in 1949.

The Jockey Club, founded at Newmarket about 1750, wrote its own rules of racing. In contrast to the earlier King's Plates rules, these new rules took into account different kinds of contests involving horses of different ages and were thus made more detailed. The new rules originally applied only to Newmarket, but, when the rules were printed in the Racing Calendar, they served as a model for rules everywhere. The Jockey Club acquired the Racing Calendar and the General Stud Book and finally in the 19th century came to control English racing, as it still does.

In France, La Société d'Encouragement pour l'Amélioration des Races de Chevaux en France (founded 1833) administers French racing, owns major racetracks and training centres, and, since 1969, has published the country's racing calendar. The studbook is published by the Ministry of Agriculture.

In the United States, the governance of racing resides in state commissions. Track operation is private. The (North American) Jockey Club, founded in 1894 in New York, at one time exercised wide but not complete control of American racing. It publishes the Racing Calendar and the American Stud Book.

English racing spread to Australia, New Zealand, Canada, South Africa, and India in the 19th century, and many of their governing bodies emulate the British.

The original King's Plates were standardized races—all were for six-year-old horses, carrying 168 pounds, at four-mile heats, a horse having to win two heats to be adjudged the winner. Beginning in 1751, five-year-olds carrying 140 pounds and four-year-olds carrying 126 pounds were admitted to the King's Plates, and heats were reduced to two miles. Other racing for four-year-olds was well established by then, and a race for three-year-olds carrying 112 pounds in one three-mile heat was run in 1731. Heat racing for four-year-olds continued in the United States until the 1860s. By that time, heat racing had long since been overshadowed in Europe by dash racing, a “dash” being any race decided by only one heat, regardless of its distance.

One major type of Thoroughbred horse race is the handicap race, in which the weights horses must carry during a race are adjusted in relation to their age (the more immature the horse, the less weight it carries). In this system, a two-year-old, the youngest racer, competes with less weight to carry than a horse that is three years or older. In general, a horse is reckoned as being fully aged at five years and is handicapped accordingly. There are also sex allowances for fillies, so that they carry slightly lower weights than males. Weight penalties or allowances are also provided on the basis of individual horses' past performance. Such handicaps may be set centrally where racing is so controlled or by individual tracks, the goal being to render all horses as nearly equal as possible by establishing what is called racing form. The handicap race thus represents an outright repudiation of the classic concept that the best horse should win. Instead, handicaps are assigned with the specific objective of giving all the horses in a race an equal chance of winning.

Some handicap races are major sporting events. For instance, the Melbourne Cup, a handicap inaugurated in 1861, is the most important race of the Southern Hemisphere. In the United States the Metropolitan, Brooklyn, and Suburban handicaps—all dating to the 19th century—were once the most valuable American events and remain reasonably comparable to the classics. The Santa Anita Handicap, first run in 1935, pioneered among such races with $100,000 or more purse value.

A racehorse achieves peak ability at age five, but the classic age of three years and the escalating size of purses, breeding fees, and sale prices have led to fewer races held with horses beyond age four. There are notable exceptions to this, however. Famous races that admit horses older than three include the Prix de l'Arc de Triomphe, the Gran Premio Internacionale Carlos Pellegrini in Argentina, the Caulfield and Sydney cups in Australia, the Grande Premio São Paolo Internacional in Brazil, the King George VI and Queen Elizabeth Stakes in England, the Gran Premio del Jockey Club and Gran Premio di Milano in Italy, the Emperor's Cup and Arima Memorial Stakes in Japan, the Wellington Cup in New Zealand, Rothman's July Handicap in South Africa, and the Gran Premio Clasico Simón Bolívar in Venezuela. Of about 60 races in the United States with purses of $100,000 or more, about half are open to horses older than three years.

Sponsored races in which much of the purse money is put up by commercial firms include the King George and Queen Elizabeth Stakes and Rothman's July Handicap. In the United States most of the purse money for the richest events is provided by the stakes fees of the owners. Purses were winner-take-all in the early days of racing, but as the racing of fields of horses came to predominate, a second prize came to be offered. Gradually third and fourth prizes were added, and occasionally fifth. On the average, modern-day purses are allocated about 60 percent to the winner, 20 percent to the second-place finisher, 10 percent to the third, and 5 percent to the fourth.

The same historical progression was followed for wagers, with the bets in early (two-horse) races being simply to win, and modern bets being placed on the first three horses (win, place, and show). From private bets, wagering was extended in the 19th century to bookmaking (a bookmaker is a professional bet accepter who tries to set his odds so that a percentage is working in his favour). Later in the century, betting was taken over worldwide by the racetrack managements in the form of the pari-mutuel. This is a common betting pool in which those who bet horses finishing in the first three places share the total amount bet minus a percentage for the management. The pari-mutuel was perfected with the introduction in the 20th century of the totalizator, a machine that mechanically records bets and can provide an almost instant reflection of betting in all pools. It displays the approximate odds to win on each horse and the total amount of wagering on each horse in each of various betting pools. The customary pools are win, place, and show, and there are such specialty wagers as the daily double (winners of the first two races), perfecta (win and place winners in order in one race), quiniela (as in the perfecta but not in order), and trifecta (win, place, show winners in order in one race). Other specialty wagers, sometimes offering extremely high payouts, require the bettor to select multiple trifectas, the winners of several races, or the first four horses in one race.

As racing became big business, governments entered wagering with off-track betting, which was very beneficial to racing in Australia, New Zealand, and France and less so in England and in New York City. In the United States illegal bookmaking off track became the province of organized crime; legal off-track betting parlours proliferated during the late 20th century.

The guiding principle for breeding (animal breeding) winning racehorses has always been best expressed as “breed the best to the best and hope for the best.” The performance of a breeding horse's progeny is the real test, but, for horses untried at stud, the qualifications are pedigree, racing ability, and physical conformation.

Racetrack stands range from the elegant (Longchamp in France, Ascot in England) to the modest and purely functional (Cologne, the Curragh in Ireland). The same variety is true of the saddling area, the paddock. Most European and other racing surfaces are grass; in North and South America the common surface is dirt, though grass became increasingly popular in the 20th century. Racing is mainly in the daytime.

Older racetracks, mainly European, conform to natural terrain, accommodations for spectators having been added later. The course at Newmarket, for example, can accommodate a race of 2.25 miles (3,600 metres) with a gentle change of direction of less than 90 degrees, but spectators cannot see all the race. Newer tracks are elliptical mile-long tracks.

The eligibility of racers is checked the day before they are raced. Before the race, jockeys weigh out and report to the paddock for instructions by trainers and mount up, the identity of the horses having been checked. Horses and riders proceed to the track in a parade to the post for the stewards' inspection and a brief warm-up gallop. Horses are almost universally started from electrically operated starting gates, the horses being walked or led into their stalls prior to the start of the race. The starter actuates the upward swing of the barrier from the stalls when all are in place. During the race, stewards and patrol judges are alert for racing violations, supplemented by a motion-picture patrol. The finish is photographed by a special camera, and when the race is close the picture is awaited before winners are announced. The race's result does not become official until the jockeys have weighed in and the riders of horses that finished in the money are certified to have carried the proper weight. At weighing in, a jockey, owner, or trainer may claim foul against a horse that interfered with his mount. The judgment of the stewards may result in a horse being lowered in order of finish from first to last. The stewards declare the race official, and then payoffs are flashed on the totalizator. Post-race urine tests are made of winning horses and a sample of the field, and if results show the presence of forbidden substances, the results may be changed on payment of purses but not on bets.

Most time records are clustered in North America, where speed has long been a desideratum. Races in the United States are timed to ¹/₅ of a second, as opposed to ¹/₁₀₀ of a second elsewhere.

The earliest American racecourses were typically straight quarter-mile sprints. For these short distances, American jockeys developed a style of riding involving a short stirrup and a crouching posture—this “American seat” eventually became standard worldwide for all distances. As longer, elliptical racetracks were built in New York and throughout the South, a greater onus was placed on jockeys to pace their horses. Because Thoroughbred horses are capable of running only about a quarter of a mile at top speed, determining what pace to set and when to unleash this burst of speed is crucial to winning. The African American jockey Isaac Murphy (Murphy, Isaac Burns) was famous in the 1880s and '90s for his “grandstand finishes.”

The training of racehorses, simply expressed, is maintaining a horse in the best condition to run. Exercise and feeding programs and knowledge of the individual horse are factors involved. A good trainer selects a jockey who suits the horse and, perhaps more important, enters the horse in suitable races. A trainer of a horse for a classic race not only must develop the horse into peak condition but must time the development so that the horse reaches its peak on a certain day, which is the most difficult art of all.

By the second half of the 20th century, horse racing had become big business. Fields regularly number a dozen or more. Once race meetings lasted a day or two, later a week or two. Now, particularly where climate allows, races are scheduled for half the days of a year or more. More racing dates require more horses, and horses are raced more intensively.

Purses grew, particularly after World War II. A new American race, the Arlington Million, in reference to the size of the purse, was first run in 1981. All of the horses racing on the flat who earned more than $1,000,000 in purses ran after World War II. By the end of the century, career earnings of horses like Cigar and Skip Away were approaching $10 million. In 1999 total purses surpassed $1 billion in North America.

Where there is gambling there is cheating, and the history of racing repeats itself with recurrent race fixing and running of ringers. A new threat to the sport arose in the 1960s with the widespread use of anti-inflammatory and coagulant drugs on horses. The winner of the Kentucky Derby in 1968 was disqualified when a post-race urine test showed a forbidden drug. Various racing bodies limited or forbade the use of such drugs; others did not. Over-racing, particularly in the United States, encouraged their use.