Vaguely inspired by the concept of the Volkswagen Beetle with where it sought to place the mechanical parts, the 500 was practical, inexpensive and entirely designed for post-war traffic in European cities. With very contained dimensions, measuring 2997 mm in length, the 500 was 245 mm shorter than the 600, launched two years earlier. Equipped with a 479cc engine, producing 13horsepower, the two-cylinder unit though air cooled, was able to keep up with city traffic without any problems. This was undoubtedly helped by its declared low weight of 499 kg. With a 2-door coupe body (conventional doors came in 1965) and a giardiniera (van) version, the 500 was able to transport four people and some cargo—although not at the same time.

Having been a commercial success, Giannini and Abarth elected to develop sporty versions. Neckar and Steyr-Puch also produced it in Germany and Austria under license. An Austrian sports version, the Steyr-Puch 650 TR2, was equipped with a two-cylinder engine manufactured by Puch; derived from a motorcycle engine.

The L version, of lusso, launched in 1967 was the best equipped and had the finest trim. The most obvious feature was the protective tubular structures fitted the front and rear fenders. It also had a new front emblem and new hub caps with a fresh contemporary design. Inside, the dashboard was covered in black plastic instead of painted metal. Also, for the first time, a central console provided more space for storage. The biggest difference, however, would be the fitting of a set of radial tires instead of the cross-screen tires which were the norm at the time. The engine’s output was increased to 18 horsepower.

Production of the 500 ended in 1975, having been gradually replaced by the 126, which had been launched in 1973. The final version of the 500, the R, had the same 594cc engine as the 126, however with less power. Fiat had started to build the final few units of the 500L using the 126 platform prior to the transition. It proved to be more comfortable than the previous versions. Sales practically disappeared with the introduction of the 126, and Fiat ended up withdrawing the 500L model.