Twenty-seven Germans and four Britons were hurt in the bombing at 22:30 local time, among them Generalmajor Hans Hoster, the Chief of Staff of NATO's Northern Army Group.
It was the headquarters of both the British Army of the Rhine and Royal Air Force Germany (RAF Rheindahlen).
The force of the blast ripped up the road and caused extensive damage to parked cars and surrounding buildings.
Unknown to the IRA unit, most of the vehicles were owned by West German military officers who had been invited to spend a social evening with their British counterparts.
A statement from the IRA said: "Our unit's brief was to inflict a devastating blow but was ordered to be careful to avoid civilian casualties."
The National Democratic Front for the Liberation of West Germany, a previously unheard of group, also claimed to have been behind the attack, but this was dismissed by police investigators.