Originally introduced to comply with the new Group A regulations of the World Rally Championship, it was soon superseded as Mitsubishi's competition vehicle by the Lancer Evolution, and subsequently developed into a high-performance showcase of the company's technology.

It instead homologated the recently introduced sixth generation of its Galant sedan for the Group A class, using the mechanical underpinnings from its aborted Starion prototype.

[6] However, Mitsubishi — and their competitors — realised that the WRC cars of the '80s were simply too big and ungainly for the tight, winding roads of rally stages.

[8][9] With the eighth generation of the Galant, Mitsubishi introduced a station wagon (known in many markets as the Legnum) to replace the old 5-door hatchback, and the VR-4 was now available in both body styles.

This complex rear diff was first seen on the Lancer Evolution IV, and used an array of sensors to detect and quell oversteer, giving the ultimate VR-4 great agility for a vehicle of its size and weight.

The Super VR-4 trim level from this model was based on the pre-facelift Type-S and sold only in January 1998 on both the Galant sedan and the Legnum wagon, with a limited run of approximately 800 units.

North America and Europe were again denied this model which was originally planned to be exclusively for the Japanese domestic market, much like the Nissan Skyline GTR but the burgeoning grey import trade meant that it developed a cult following in several overseas territories, especially United Kingdom, New Zealand and Australia.

In 2000 MMC's motorsport partner Ralliart was contracted to type-approve Galants and Lancers for UK sales, and 200 VR-4s were officially imported before production finally ceased two years later due to the revision of vehicle emission standards in Japan.

The Mitsubishi Galant VR-4 Type V shared the same engine as all the other eighth generation variants, twin turbo V6 6A13 and was offered in both manual and automatic transmissions.