To meet the demands of the post-war market which called for economy cars, the Fiat 500 was rear-engined on the pattern of the Volkswagen Beetle. Several car makers followed this now nearly vanished design at the time and were quite successful, but only the Fiat 500 was used as the template for other car makers in Europe. The firms Neckar of Germany and Steyr-Puch in Austria each made cars that were legally based on the Fiat 500.

Despite its diminutive size, the 500 proved to be an enormously practical and popular vehicle throughout Europe. Besides the two-door coupé, it was also available as the "Giardiniera" station wagon; this variant featured the standard engine laid on its side, the wheelbase lengthened by 10 cm (4 in) which yielded a usable rear seat, a full-length sunroof, and larger brakes from the Fiat 600.

Production of the 500 ended in 1975, although its replacement, the Fiat 126, was launched two years earlier. The 126 was never as popular as its predecessor in Italy, but was (and still is) enormously popular in the former Eastern Bloc countries, where it is famed for mechanical durability and economy.