The stimulus for the creation of a racing circuit at Pembrey was the closure of the motor racing facility at Llandow near Cardiff. Port Talbot Motor Cycle Racing Club were the first organisation to put on racing events at this circuit. In 1981 the Welsh Race Drivers' Association (WRDA) was formed with the expressed intention of developing a new race circuit in Wales. At the same time the former RAF airfield at Pembrey, which had been used as a chicken farm, was acquired by Llanelli Borough Council. Following a representation by the WRDA the decision was taken to construct a racing circuit at the venue. The first race meeting was held on 21 May 1989, and the winner of the first race at the circuit was Nigel Petch in an MGB.

In 1990 the BARC signed a 50-year lease to operate the circuit on behalf of Carmarthenshire County Council.