The story begins when street racers called the RedSuns, a team from Mt. Akagi, come to challenge Mt. Akina's local SpeedStars team to a "friendly" race. After seeing how skilled the RedSuns are, the SpeedStars treat it as a race for pride, determined not to be humiliated on their home turf. However, the SpeedStars are left in a bind when their team leader and primary downhill driver Iketani has an accident during a practice run.

A group of street racers called Team Emperor, all using Mitsubishi Lancer Evolutions, appear in the Gunma area, defeating anyone in their path, until their No. 2 racer, Seiji Iwaki, was defeated by Takumi, breaking their winning streak. Their leader, a professionally-trained driver named Kyoichi Sudo, challenged Takumi to a race at Akagi to “teach him some things” and as a sort of cover event for his race with Ryosuke, his primary target. Takumi declined his proposal at first but eventually accepted after being infuriated with seeing Natsuki with the Mercedes Driver which left him at a disadvantage from the get-go. This race saw Takumi's Eight-Six blow its engine. While it may have been a defeat for Takumi, Kyoichi did not consider it a race instead considering it more as a seminar to show Takumi how much he needs a better car as he believes the Eight-Six is far too old to match Takumi's skill level.

This series focuses on the exploits of the new team founded by Ryosuke, Project.D, which is composed of Ryosuke (leader and strategist), downhill specialist Takumi, uphill specialist Keisuke, and a staff consisting primarily of members of the Akagi Red Suns. The team travels the region, challenging other teams and posting the results of the battles on their website. Each race is intended by Ryosuke to develop a specific area of his drivers' skills. By this time, Takumi matures slowly into a more confident and knowledgeable street racer, while Keisuke improves on his technical driving skills. Takumi instinctively develops many new techniques through his own ingenuity after some prompting by Ryosuke, such as "Blind Attack", a passing with his headlights off so that his opponent is unable to see him coming and block him, and using weight shifting to execute manoeuvres similar to the gutter-hook technique on Akina.

Still working as part of the Project D driving team, Takumi Fujiwara and Keisuke Takahashi continue to challenge courses and teams in the Kanagawa Prefecture. Meanwhile, a young golf phenom catches Takumi's eye, and Ryosuke Takahashi settles a score from his past.

After a long break, after every racing team in the prefecture is defeated, everything comes down to one last race. Takumi Fujiwara has never lost a race, but when his opponent is also using an AE86, it turns into a battle of the AE86. Will Project D succeed in the final and most difficult race of Initial D?