The Betone-designed Stratos was built for one purpose, to win the World Rally Championship. Two prototype versions of the Stratos were shown, one during the 1970 Turin Motor Show and another a year later. The road-going versions of this car were built only to satisfy the homologation rules. As a result, the road version had noisy cockpits, was uncomfortable, and did not have good cabin air circulation. The front part of the car housed cooling fans and a spare tire. So it was not very practical when it came to luggage.

In 1973, the Stratos won the first rally it participated in. From 1974 through 1976 it dominated the rally scene by capturing the World Championship.

Since Lancia was owned by Fiat, who also owned Ferrari, there was a wealth of resources to draw from. And such, a Ferrari Dino V6 quad-cam engine was used and placed in the rear of the car. The engine was capable of producing almost 200 horsepower which could propel the car from zero to sixty mph in just 7 seconds. A five-speed manual gearbox and 9.9 inch vented disc brakes were also used.

The body was built by Bertone and light-weight fiberglass was used whenever possible.

The rear spoiler provided downforce and channeled air into the engine ducts. If the vehicle rolled-over the spoiler was actually strong enough to take the impact of the tumble.