AMT 1/25

In early 1963, General Motors management banned divisions from involvement in auto racing. This decision followed the 1957 voluntary ban on automobile racing that the Automobile Manufacturers Association instituted. By the early 1960s, Pontiac's advertising and marketing approach was heavily based on performance. With GM's ban on factory-sponsored racing, Pontiac's managers emphasized street performance.

In his autobiography Glory Days, Pontiac chief marketing manager Jim Wangers, who worked for the division's contract advertising and public relations agency, states that John DeLorean, Bill Collins, and Russ Gee were responsible for the GTO's creation. It involved transforming the upcoming second-generation Pontiac Tempest (which reverted to a conventional front-engine with front transmission configuration) into a sporty car, with a larger 389 cu in (6.4 L) Pontiac V8 engine from the full-sized Pontiac Grand Prix hardtop coupe in place of the standard 326 cu in (5.3 L) V8. By promoting the big-engine option as a unique high-performance model, they could appeal to the youth market (which had also been recognized by Ford Motor Company's Lee Iacocca, who was preparing the Ford Mustang variant of the second-generation Ford Falcon compact).

The GTO disregarded GM's policy limiting the A-body intermediate line to a maximum engine displacement of 330 cu in (5.4 L). The development team discovered a loophole in the policy that did not restrict the offering of large engines as an option. Pontiac general manager Elliot "Pete" Estes approved the new model with sales manager Frank Bridge limiting initial production to 5,000 cars.. 

Second generation (1968–1972)

General Motors redesigned its A-body line for 1968, with more curvaceous, semi-fastback styling, which was a revival of a streamlining on all GM products from 1942 until 1950 as demonstrated on the Pontiac Streamliner. The wheelbase was shortened to 112.0 in (2,845 mm) on all two-door models. Overall length was reduced 5.9 inches (150 mm) and height dropped half an inch (12 mm), but overall weight was up about 75 lb (34 kg). Pontiac abandoned the familiar vertically stacked headlights in favor of a horizontal layout, but made hidden headlights available at extra cost. The concealed headlights were a popular option. The signature hood scoop was replaced by dual scoops on either side of a prominent hood bulge extending rearward from the protruding nose.