The company has a strong racing heritage, as Hirotoshi Honda began building his own racing car in a workshop at his father's house, shortly before he graduated from Nihon University in 1965. Masao Kimura is a veteran racer with more than 50 victories in Honda sports cars and single-seaters and worked for Honda R&D and then Honda Racing Service before helping Hirotoshi Honda establish Mugen.

The company specializes in tuning Honda engines. Beginning with the 1200 cc Honda Civic engine, it went on to develop, and now designs and builds, both two-stroke and four-stroke engines, manufacturing many of the major components itself.

Mugen ultimately intends to build its own road cars and the first step towards this was the creation of bodykits for the Honda Ballade CR-X in 1984. Since then, the company has produced a number of body kits for Honda machinery, culminating with the Mugen NSXprototype in 1992.^[1]

Following Hirotoshi Honda's tax evasion allegation in late 2003, Mugen was restructured in early 2004 with the establishment of M-TEC. The new company retained the right to use the Mugen trademark and its headquarters in Asaka, Saitama, in the northern suburbs of Tokyo close to the Honda R&D facility at Wako. Although it is a legally separate entity, M-TEC kept Mugen's existing staff and is headed by former Mugen board member Shin Nagaosa, who was the engineering division manager at Mugen and been involved with running Mugen's NSX racing program.