Williams Grand Prix Engineering Limited, currently trades as AT&T Williams and was founded and run by Sir Frank Williams and Patrick Head. The team was formed in 1977 after Frank Williams' two earlier and, compared with Williams F1's achievements, unsuccessful F1 operations: Frank Williams Racing Cars (1969 to 1975) and Walter Wolf Racing (1976). All of Williams F1 chassis are called "FW" then a number, the FW being the initials of team owner, Frank Williams.

Williams' first race was the 1977 Spanish Grand Prix, where the new team ran a March chassis for Patrick Nève. Williams started manufacturing its own cars the following year, and Switzerland's Clay Regazzoni won Williams' first race at the 1979 British Grand Prix. At the 1997 British Grand Prix, Canadian Jacques Villeneuve won the team's 100th race, making Williams one of only three teams in Formula One, alongside Ferrari and fellow British team McLaren, to win 100 races. Williams won nine Constructor's titles between 1980 and 1997. This stood as a record until Ferrari surpassed it in 2000.

Williams have worked with many notable engine manufacturers, most successfully with Renault: Williams won five of their nine constructors' titles with the French company. Along with Ferrari, McLaren, and Renault (formerly Benetton), Williams is one of the "Big Four" teams that won every constructors' championship between 1979 and 2008 and every driver's championship from 1984 to 2008.

The Williams FW16 was designed by Adrian Newey with the major regulation changes that the FIA had introduced in the off-season, banning the electronic devices that had been used by the front running cars during the preceding two seasons.

The FW16 was a passive evolution of the FW15C that had preceded it. It featured revised bodywork, with a low profile engine cover and enclosed driveshaft and an anhedral rear wing lower element, the latter being hinted at in the preceding FW15C. In addition to these changes it featured an innovative rear suspension wishbone design and an improved version of the Renault Sport Formula One engine (RS6). In addition it featured a fuel valve to enable the ability for mid race refuelling.

Williams later introduced a B-spec car, featuring the compulsory open airbox rear and featuring shorter sidepods than the FW16. The car was powered by a 67-degree V10 engine by Renault Sport termed the RS6 specification. Its power was transmitted by means of a revised and lightened version of the six-speed transverse gearbox used the previous year. Their main sponsor was Rothmans, replacing Camel Cigarettes and Canon used on the FW14 and FW15C.

The car configuration included a distinctive anhedral rear wing lower element, the effectiveness of which depended on a low outboard tail section, which was achieved by totally enclosing the driveshafts within wing-section carbon fibre composite shrouds that doubled as the upper wishbones. This shroud was removable in case it was deemed to be outside the imposed regulations.