In response to Lancia's rallying success with the mid-engined Stratos, Renault's Jean Terramorsi, vice-president of production, asked Bertone’s Marc Deschamps to design a new sports version of the Renault 5 Alpine supermini. The distinctive new rear bodywork was styled by Marcello Gandini at Bertone.

Although the standard Renault 5 has a front-mounted engine, the 5 Turbo featured a mid-mounted 1397 cc Cléon-Fonte turbocharged engine placed behind the driver in mid-body in a modified Renault 5 chassis. In standard form, the engine developed 160 metric horsepower and 163 lb·ft of torque.

Though it used a modified body from a standard Renault 5, and was badged a Renault 5, the mechanicals were radically different, the most obvious difference being rear-wheel drive and rear-mid-engined instead of the normal version's front-wheel drive and front-mounted engine. At the time of its launch it was the most powerful production French car.

The first 400 production 5 Turbos were made to comply with Group 4 homologation to allow the car to compete in international rallies, and were manufactured at the Alpine factory in Dieppe..