Vatanen was born and grew up in rural Tuupovaara in Eastern Finland. His debut year in professional rallying was 1970, and he debuted in the World Rally Championship at the 1974 1000 Lakes Rally. His first international rally was the 1975 Rothmans 747 Rally in Jamaica driving a Datsun 120Y. He placed 12th with co-driver Gerry Phillips. He won the British Rally Championship in 1976 and 1980 with Peter Bryant and David Richards. In 1977, Vatanen became a regular privateer contestant in the WRC with a Ford Escort RS1800. For the 1979 season, he was signed by Rothmans Rally Team. Continuing with an RS1800, he took his debut win at the 1980 Acropolis Rally and became the World Rally Champion in 1981. From 1979 until the end of 1981, Vatanen was co-driven by David Richards, who went on to become chairman of Prodrive, the Banbury based motorsport team and one of the most influential figures in British (and worldwide) motorsport. In the 1982 season, Vatanen did not defend his title and competed in only three world rallies.

“Driving has been the pencil I have painted my life with.”
– Ari Vatanen

In 1984, Vatanen signed to drive the Peugeot 205 T16 for Peugeot’s factory team. From the 1984 1000 Lakes Rally to 1985 Swedish Rally, Vatanen won five world rallies in a row. Close to death after a major accident on the 1985 Rally Argentina, Vatanen spent 18 months winning a personal health battle over serious injury and depression. He went on to make a complete recovery and his return to motorsport in 1987 saw him go on to win the Paris-Dakar Rally four times; with Peugeot in 1987, 1989 and 1990, and with Citroën in 1991. He became the centre of controversy when his car was stolen whilst leading the same rally in 1988.

With Peugeot, Vatanen also won the Pikes Peak International Hill Climb, after Peugeot stopped participating in the World Rally Championship in 1986, due to the demise of Group B rallying. Peugeot used the lessons learnt from its 205 T16 to create the 405 T16. With at least 600 bhp (447 kW), large aerofoils, four-wheel drive and four-wheel steering, Vatanen took the car up the hill in record time, his efforts being captured in the award-winning short film Climb Dance.

Vatanen’s autobiography Every Second Counts, detailing his life and career up until that point, was published in 1988 (SAF Publishing, ISBN 0-946719-04-7) and instantly became a best seller.

Vatanen continued competing in the World Rally Championship more or less actively until the 1998 season. He drove for Mitsubishi Ralliart Europe in four events in 1989 and in five events in 1990. His best result with the Mitsubishi Galant VR-4 was second at the 1990 1000 Lakes Rally. From 1992 to 1993, he competed for Subaru in 11 events, finishing second three times, including on the debut event of the first Subaru Impreza in Finland. Vatanen briefly led the event before being overhauled by eventual winner Juha Kankkunen. Even so, he was dropped by the Subaru team at the end of the 1993 season in favour of Carlos Sainz.

The following year he returned to the wheel of a Ford, driving the Ford Escort RS Cosworth for a semi-private team, and then being co-opted into the Ford factory team where he stood in for the injured Francois Delecour. His most notable result that year was a podium finish on Rally Argentina, the first time he had contested the event since his accident there nine years previously.

The 1995 and 1996 seasons were quiet for Vatanen, whose career as a top-line driver was slowly drawing to a close. At the time there was a surplus of drivers and those late in their careers, such as Vatanen, tended to lose out in favour of younger talents. Nevertheless, he continued to contest a few events then and in subsequent years, his best result being a podium finish at the 1998 Safari Rally. He then briefly returned to a works Subaru for the season-ending Rally of Great Britain, marking his 100th World Rally Championship event.

Although he became much less active in rallying, his hunger for motorsport had not left him completely however, and Vatanen joined Nissan in the Paris-Dakar in 2003, finishing seventh. He also made an appearance at the 2003 Rally Finland with a Bozian Racing-prepared Peugeot 206 WRC, and finished eleventh. In 2004 and 2005, Vatanen drove the Dakar for Nissan as well, and in 2007 he made another attempt with Volkswagen, but retired on the seventh stage.

He currently holds the position of ‘Club Patron’ to the Ireland’s Donegal Motor Club since 2002. He has a long association with the Donegal Motor Club and the Donegal International Rally, competing twice early in his career, 1975 and 1978.

Despite having no roots in Estonia, in January 2013 Vatanen was named as the candidate of presidency by the board of the Estonian Autosport Union to become first foreign President of the authority. Vatanen said he had always been in good relations with Estonians and he’s deeply impressed by the achievements of such a small country. Rumours said that the other candidate will be Estonian most famous former rally driver Markko Märtin. Without any rival candidate Vatanen was elected President of the Estonian Autosport Union.

In September 2008, Vatanen took part in the Colin McRae Forest Stages Rally, a round of the Scottish Rally Championship centred in Perth in Scotland. His co-driver was once again David Richards and they competed in the same Rothmans sponsored Ford Escort RS1800 that they drove in 1981. He was one of a number of ex-world champions to take part in the event in memory of McRae, who died in 2007.