The first generation Octavia was released in November 1996 for the 1997 model year and was built at the modernised Škoda factory in Mladá Boleslav, Czech Republic.[6] This generation was made available in liftback or estate styles.

In the United Kingdom, sales began in 1998 and the mid-size car was a success, nearing the success of established large family car favourites such as the Ford Mondeo and Vauxhall Vectra.[9]

The first generation Octavia had a facelift in 2000[10]for the 2001 model year, and was still manufactured and marketed in some markets, even after the second generation was introduced in 2004. In Germany, and other parts of West Europe, as well as Asia, the first generation model was marketed as the Octavia Tour, while the newer model is marketed as the Octavia. In some markets, the first generation Octavia was still known as Octavia, and the newer model was referred to as the new Octavia, Octavia5 (Greece) or Laura (India). 

In India, the Octavia was launched in 2002 and was an instant hit for its frugal engines and solid build. It became a huge success in India, selling 44,900 units.