Although Warszawa-based replacements had been under development within the FSO, the authorities decided to pursue talks with the Italian Fiat, which was seeking to expand its international presence by establishing production in the countries of the Eastern Bloc.

FSO's over 100 Polish suppliers were also involved in the effort, as well as other manufacturers from the Eastern European assembling Fiat-licensed models – Crvena Zastava works in Yugoslavia and the newly organised VAZ in the Soviet Union.

The production preparation process took almost two years, with the assembly of pre-production test series from parts imported from Italy commencing on 28 November 1967.

Polish cars differed in many details from Italian ones: most visible were the double round headlights instead of the square ones, simpler bumpers and front grill, orange color front turn signal lenses, simpler body sheet metal stampings, and the old Fiat 1300/1500 chassis and interior (dashboard, column shifter etc.).

[3] An unusual variant built in a small series was a lengthened cabriolet with three rows of seats, used by the tourist bureau in Warsaw for sightseeing.

In the late 1980s the 125p received its last upgrade in form of power train from the FSO Polonez and a new instrument cluster featuring round gauges in place of the classic Fiat speedometer.

Škoda had abandoned its range of rear-engined saloons and coupés in favour of modern front-engined hatchbacks, Zastava only offered the Yugo, and the (East German) Wartburgs were no longer available.

In Poland the Fiat 125p is called "Kredens" ("Cupboard"), "Kant" ("Edge") or "Bandyta"/"Bandzior" ("bandit"/"cut-throat") by the younger members of society.