The GTI version came in 1.6-litre and 1.9-litre, in-line four cylinder configurations, and is considered one of the best hot hatches of all time. Compared to modern cars they can be tricky to handle, due to their tendency towards rather sudden lift-off oversteer during hard cornering, and a complete absence of electronic driver aids. However once mastered, or in the hands of a skilled driver, these cars are still known to offer a very rewarding driving experience. The 205 GTI was certainly one of the first front wheel drive cars said by many motoring experts to be as rewarding to drive hard as an equivalent rear-wheel drive car.
The 1.6 GTI came with a XU5J engine, producing 105 bhp DIN (77 kW), for the 1987 model year the XU5J received the cylinder head with larger valves from the 1.9 GTI's XU9JA engine thus becoming XU5JA. The new engine was quoted for 115 bhp (86 kW; 117 PS) . The 1.9 GTI came with an XU9JA engine producing 128 PS (94 kW; 126 hp) , although later models with a catalytic converter produced 122 PS (90 kW; 120 hp) . Internally these engines are very similar, the main differences on 1.9-litre versions being the longer stroke, oil cooler, and some parts of the fuel injection system. The shorter stroke 1.6-litre engine is famed for being revvy and eager, while the 1.9-litre feels lazier and torquier. Outside the engine bay the main differences between the 1.6 GTI and the 1.9 GTI are half-leather seats (1.9 GTI) vs. cloth seats (1.6 GTI); and disc brakes all-round (1.9 GTI) vs. discs at the front and drum brakes at the back (1.6 GTI); as well as the 14-inch (360 mm) alloy wheels (1.6 GTI) vs. 15 inch alloys (1.9 GTI).
The 205 is still mentioned to this day in group car tests of the newest GTI models or equivalent. Peugeot itself has never truly recreated this success in future GTI models, although came very close with the highly regarded GTI-6 variant of the Peugeot 306. A cabriolet version of the 205, known as the CJ (or CT in France), was designed and partially assembled by Pininfarina of Italy. A CTi version, with the same plastic arches and wheels as the 1.6 GTI was also available. Some later models incorporated the catalysed 1.9 engine.
The main aesthetic difference between the GTI/CTi versions and other 205 models were the plastic wheel arches and trim, beefier front and rear bumper valances. The shell also underwent some minor changes, including larger wheel arches (to suit the larger wheels on the GTI and CTi), and the suspension was redesigned and sat lower on the GTI with stiffer springs, different wishbones and a drop-linked arb.
With the early success of the 205 GTI in Europe, Motor Trend reported in 1984 that Peugeot was seriously considering adding it to its US lineup, even though Peugeot had a more upmarket image in the United States. Nothing ever came of such rumours, however, and any talk of Peugeot expanding its presence in US became moot when it was forced to pull out in 1991.
Sales of the GTI in the early 1990s were badly hit by soaring insurance premiums, brought about by high theft and 'joyriding' of cars of this sort. Increasingly stringent emissions regulations meant the 1.6GTI went out of production in 1992, while the 1.9 was sold for a couple more years thanks to re-engineering of the engine to enable it to work properly with a catalytic converter, which dropped power to 122bhp.
A common modification for fast road/track use is to transplant a '16V' Peugeot/Citroen engine and ECU (XU9J4 Type D6C / XU9J4Z Type DFW), as used in Citroen BX 19 GTI 16V and the Peugeot 405 Mi16. This is a development of the 205 T16 engine, the XU8T, the essential difference compared to the car's original XU 8-valve engine is the 16-valve double overhead camshaft cylinder head. The engine will fit into the small Peugeot's engine bay with modifications (the provision of necessary clearance between the exhaust manifold / firewall and intake manifold / radiator), the method of installation varies depending on how professionally it is installed. Weight gains are negligible, and the rise of between 30 to 60 horsepower (depending on the original engine being replaced vs. the engine being transplanted) is startling in so light a car. Less common and also less reliable is the practice of turbocharging or even supercharging the standard XU 8-valve unit. Over 200 bhp (149 kW; 203 PS) has been achieved from a standard engine with the correct fuelling using this method. More may be available, although the usual turbo problems of high exhaust temperatures, detonation and turbine lag will inevitably creep in.
Special 205 GTI editions
Peugeot produced some limited edition 205 GTI models over the car's life.
In 1990, 1200 GTIs were made in the then new colours of Miami blue (see photo above) and Sorrento Green (a very dark metallic green). The cars were made in an equal mix of 300 blue 1.6, 300 green 1.6, 300 blue 1.9 and 300 green 1.9. The cars had power steering and full grey leather interior as standard, together with grey carpets. These paint colours were then added to the list of available colours for ordinary models.
The Gentry was a limited edition with all-leather interior, 105 bhp (78 kW; 106 PS) 1.9 engine, automatic transmission and some other extras. Gentries came in the color Sorrento Green and Aztec Gold (sometimes called Beige Mayfair).
The Griffe was a special GTI edition for mainland Europe, and was sold in France, Germany and the Netherlands. It was bright green ('Laser' Green or 'Vert Fluorite'), and came equipped with all available vendor options at that time except air-conditioning, but including full black leather interior, ABS, powersteering and sunroof. Approximately 3,000 Griffes were made, all in laser green and with dark grey anodised alloy wheels with a silver rim.
The 1FM was produced only in the UK in 1992 to coincide with the 25th birthday of BBC Radio 1. Only 25 were made and each car was individually numbered with a small brass plate. Every one was black and had dark grey anodised alloy wheels with a silver rim. The car had every extra as standard including ABS, air conditioning, catalytic converter, full black leather interior, power steering and remote central locking. A special stereo system including a CD changer and an acoustic rear shelf was designed by Clarion especially for this car. The car had unique 'Radio 1' badging, and Radio 1 ran a competition on air to win one.