The race was founded as a publicity event for the newspaper L'Auto (predecessor to the present l'Équipe) by its editor, Henri Desgrange, to rival the Paris-Brest race (sponsored by Le Petit Journal), and Bordeaux-Paris.The idea for a round- France stage race came from one of Desgrange's youngest journalists, Georges Lefevre, with whom Desgrange had lunch in a bar in Montmartre Paris on November 20, 1902. L'Auto announced the race on January 19, 1903. It was a huge success for the newspaper; increasing circulation from 25,000 before the 1903 race to 65,000 after it; in 1908 the race boosted circulation past a quarter of a million, and during the 1923 race, it was selling 500,000 copies a day. The record circulation claimed by Desgrange was 854,000 in 1933. 

The Tour is a "stage race" divided into a number of stages, each being a race held over one day. The time each rider takes to complete each stage is recorded and accumulated. Riders are often awarded time bonuses as well as prizes for strong finishes. Riders who finish in the same group are awarded the same time. Two riders are said to have finished in the same group if there is less than the length of a bike between them. Riders crash in the last three kilometres are given the time as the group in which he would have otherwise finished. The rankings by accumulated time are known as the General Classification. The winner is the rider with the least accumulated time after the final day. It is possible to win the overall race without winning any individual daily stages (which Greg LeMond did in 1990). Winning a stage is considered a great achievement, more prestigious than winning most single day races. Although the number of stages has varied, the modern event has consisted of about 20 stages and a total distance of 3,000 to 4,000 km. There are also competitions within the race (see below), some with distinctive jerseys for the best riders. 

The modern race is now between teams backed by commercial sponsors, although the event began for individual riders. Such modern-day tactics such as slipstreaming were strongly condemned by Desgrange, however he accepted their inevitability only during the 1920s. Even when commercial teams had become commonplace in other events, the Tour's participants were mostly national teams from 1930 to 1961 and again in 1967 and 1968, in both cases because the organisers felt that sponsors were detracting from the sporting quality of the race. 

Most stages take place in France although it is common to have stages in nearby countries, such as Italy, Spain, Switzerland, Belgium, Luxembourg, Germany, the Netherlands, the Republic of Ireland, and the United Kingdom (visited in 1974 and 1994 and start of the 2007 tour). The three weeks usually includes two rest days, sometimes used to transport riders long distances between stages. In recent years, the race has been preceded by a short individual time trial (1 to 15km) called the prologue. Since 1975, the finish has been in Paris on the Champs-Élysées, the only time the city's most symbolic avenue is closed other than for the processions n July 14, a national holiday. 

Stages can be flat, hilly or mountainous. Riders start together with the first over the line being accorded the victory, but they can also be run as races against the clock for individuals or teams. The time-trials often have a significant effect on the overall outcome because they separate riders by significant margins, whereas in some conventional stages the participants finish together or in a few large groups. The overall winner is almost always a master of the mountain stages and time trials.