In 1970 Tony Rudd, who had arrived at Lotus the previous year, proposed two new model development projects. The first, Project M50, resulted in the 1974 Elite. The second, Project M70 was to be a two-door fixed-head mid-engine coupé.

The Esprit was launched in October 1975 at the Paris Motor Show and entered production in June 1976, replacing the Europa in the Lotus model lineup. The wedge-shaped fibreglass body was mounted on a steel backbone chassis. Power was from the 1,973 cc (120.4 cu in) Lotus 907 four-cylinder engine that was rated at 160 hp in European trim and 140 hp in US/Federal trim. The engine was mounted longitudinally behind the passengers and drove the rear wheels through a Citroën C35 5-speed manual transaxle also used in the SM and Maserati Merak. The Series 1 embodied Lotus' performance through light weight mantra, weighing less than 1,000 kg (2,205 lb).

While the S1 Esprit was lauded for its handling and was said to have the best steering of any Esprit, it was generally regarded as being under-powered, especially in markets such as the United States where the engine was stifled by emission controls. Lotus' claim of acceleration from 0–60 mph in 6.8 seconds and a top speed of 138 mph may have been optimistic, as actual road tests revealed a 0-60 mph acceleration time of 8 seconds and a top speed of about 133 mph.

In 1978, the revised Series 2 Esprit was introduced. External changes included intake and cooling ducts added behind the rear quarter windows, taillights from the Rover SD1, and an integrated front spoiler. S2 Esprits also had 14 in Speedline alloy wheels designed by Lotus. Other changes included relocating the battery from above the right side fuel tank under the rear quarter window to the rear of the car, adding an access door to the engine cover, installing wider seats and replacing the Veglia instrument cluster with individual gauges made by Smiths and a new style of illuminated dashboard switches. Many switches and buttons came from the Morris Marina.

A special edition model was released to commemorate Lotus' victory in the 1978 F1 World Championship. Wearing the black and gold livery of John Player & Sons (JPS), Lotus' F1 sometime sponsor, these cars were known as the Commemorative Edition Esprits as Lotus was no longer sponsored by JPS. They were mechanically identical to the regular 2.0, with special seat and dash trim, smaller steering wheel and special plaque. According to Lotus a series of 300 were built, but it is likely the total was considerably lower. Lotus' production records are notoriously vague, but reliable estimates suggest that 149 Commemorative Esprit cars were made.