The Q7 (internally designated Typ 4L) utilizes a modified version of the Volkswagen Group PL71 platform. Previewed by the Audi Pikes Peak quattro concept car, the Q7 is designed more for on-road use, and was not meant for serious off-road use where a transfer case is needed. In an off-road test through the Australian outback it fared well for a "soft roader".

Although it lacks a low-range transfer case, it has quattro permanent four-wheel drive system with a central locking differential, and a self-levelling air suspension with Continuous Damping Control, called Adaptive air suspension, which helps in off-road situations.

Development began in 2002 under the code AU 716, primarily focused on the Pikes Peak Concept. Design work was frozen for the Concept in July 2002, for presentation at the North American International Auto Show in January 2003. Following the introduction of the concept, full-scale development began on Typ 4L of the PL71 platform.

The production design was frozen in late 2003, for a late 2005 start of production. Prototypes went into testing in 2004, with development concluding in the first half of 2005. It introduced the world's only series production passenger car V12 TDI diesel engine. While the Q7 has been the flagship SUV in Audi's product portfolio, a new top-of-the-line model, which is likely to be called the Audi Q8, is on the cards. It debuted in its concept form at the 2017 Detroit Auto Show.