Women's air racing all started in 1929 with the First Women's Air Derby. Twenty pilots raced from Santa Monica, CA to Cleveland, OH, site of the National Air Races. Racing continued through the 1930s and was renewed again after WWII when the All Women's Transcontinental Air Race (AWTAR), better known as the Powder Puff Derby, came into being. The All Women's Transcontinental Air Race held its 30th, final and commemorative flight in 1977. The Air Race Classic, Ltd. stepped in to continue the tradition of transcontinental speed competition for women pilots and staged its premier race. The Air Race Classic was reincorporated in 2002 into the Air Race Classic, Incorporated.

The early air races were the "on to" type, with noon and night control stops, and the contestants more or less stayed together. In that manner, weather and flying conditions were practically the same for each entrant and the race officials could release standings to the media after each day of racing.

The current race routes are approximately 2,400 statute miles in length, and the contestants are usually given four days, flying visual-flight rules (VFR) in daylight hours, to reach the terminus. Each plane is assigned a handicap speed – and the goal is to have the actual ground speed be as far over the handicap speed as possible. The pilots are thus given the leeway to play the elements, holding out for better weather, winds, etc. The objective is to fly the "perfect" cross-country. In this type of race, the official standings cannot be released until the final entrant has crossed the finish line. Actually, the last arrival can be the winner.

Scoring techniques evolved over the years, and in 1952 the All Women's Transcontinental Air Race began using the handicap system of scoring. The Air Race Classic has continued to use this type of scoring throughout its history. The 1929-30s races flew shorter legs and made more stops than the current races. Now the legs are 280 to 320 statute miles, and seven or eight control stops are designated for either landing or fly-by. The races are open to all women with fixed wing aircraft from 145 to 570 horsepower. In earlier days, the fastest airplane with no specified handicap was in a good position to win, if it held together over the long haul and there was no big navigational error committed. Now the handicapping system is used – each plane flying against its own speed. Supposedly any entry has an equal chance of victory, depending on the accuracy of the handicapping. All participants are true winners in their own right, flying the best possible race.

Award-wise, the Air Race Classic started in 1977 with an $8,550 purse for the top-ten crews, with additional leg prizes for those finishing outside the selected group of ten. The awards have been increased over the years, so that the current top-ten purse is $15,000.

The Air Race Classic is the longest-running all-female airplane race in the world. Purdue University teams have competed in the Air Race Classic since 1994. Mary Ann Eiff, assistant professor of Aviation Technology was the faculty advisor to Purdue's chapter of Women in Aviation when Purdue teams first took part in the race. Purdue University hosted the race in 2005.