The production model (internal designation Type 8N) was launched as a coupé in September 1998, followed by a roadster in August 1999. It is based on the Volkswagen Group A4 (PQ34) platform as used for the Volkswagen Golf Mk4, the original Audi A3, the Škoda Octavia, and others. The styling differed little from the concept, except for slightly reprofiled bumpers, and the addition of rear quarterlight windows behind the doors. Factory production commenced in October 1998.

Early TTs were cited in a series of fatalities from accidents involving speeds over 112 mph (180 km/h), abrupt lane changes or sharp turns. Both the coupé and roadster variants were recalled in late 1999/early 2000, to improve the car's handling predictability at very high speeds.[13] Audi's Electronic Stability Programme (ESP) or Anti Slip Regulation (ASR) were added, as well as a rear spoiler, along with modifications to the suspension system. All changes were incorporated into subsequent production.