The third generation Audi 100, launched in September 1982, had an aerodynamic look, achieving a drag coefficient of 0.30 for its smoothest base model. The increased aerodynamic efficiency resulted in better fuel economy. The design was in contrast from the boxy shape of the C2. Audi innovated flush windows on the C3, a key area for aerodynamic drag that has been widely adopted by other manufacturers. The aerodynamic body gave the 100 higher top speed than other cars of similar engine size. A new technology introduced in the C3 included the procon-ten safety system.

The two-door models were no longer available, and the Audi 100 Avant was introduced with available extra folding third row seat — not available in conjunction with ABS-brakes as the brake control unit sat in the same space. The 200, launched in 1983 continued as the upmarket variant with several versions of the 2.2 L turbo 5-cylinder available in different markets over its life ranging in power outputs from 165 PS (121 kW) MC engine, through the 200 PS (147 kW) versions to the final 220 PS (162 kW) 20-valve 3B engine available from 1991. The 1983 Audi 200 Turbo had a top speed of 139 mph (224 km/h). The MC turbo engine was available in the 100 as well for some markets.