The production model (internal designation Typ 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 October 1998.

Early TT models received press coverage following a series of high-speed accidents and the related fatalities which occurred at speeds in excess of 180 kilometres per hour (110 mph) during abrupt lane changes or sharp turns. Both the Coupé and Roadster models were recalled in late 1999/early 2000, to improve predictability of the car's handling at very high speeds. Audi's Electronic Stability Programme (ESP), or Anti Slip Regulation (ASR) and rear spoiler were added, along with suspension modifications. All changes were subsequently incorporated into future series production versions of the car.

The original generation Audi TT was nominated for the North American Car of the Year award for 2000. It was also on Car and Driver magazine's Ten Best list for 2000 and 2001. By 2003 Audi had provided a "face-lift" to the TT, with a number of small styling and practicality improvements.

Factory production of this generation (2000-2006) ended in June 2006.