Based on the Honda J-VX concept car unveiled at the 1997 Tokyo Motor Show, the Insight was introduced in Japan in November 1999 as the first production vehicle to feature Honda's Integrated Motor Assist system. In the following month, December 1999, the Insight became the first hybrid available in North America, followed seven months later by the Toyota Prius.

The Insight featured optimized aerodynamics and a lightweight aluminum structure to maximize fuel efficiency and minimize emissions. Until 2015, the first generation Insight ranks as the most fuel-efficient United States Environmental Protection Agency (EPA) certified gasoline-fueled vehicle, with a highway rating of 61 miles per US gallon (3.9 L/100 km; 73 mpg‑imp) and combined city/highway rating of 53 miles per US gallon (4.4 L/100 km; 64 mpg‑imp).

The Honda Insight is a subcompact liftback 3,945 mm (155.3 in) in length with a wheelbase of 2,400 mm (94.5 in) a height of 1,355 mm (53.3 in) and a width of 1,695 mm (66.7 in). The first-generation Insight was manufactured as a two-seater, launching in a single trim level with a manual transmission and optional air conditioning. In the second year of production two trim levels were available: manual transmission with air conditioning, and continuously variable transmission (CVT) with air conditioning. The only major change during its life span was the introduction of a trunk-mounted, front-controlled, multiple-disc CD changer.

In addition to its hybrid drive system, the Insight was small, light and streamlined — with a drag-coefficient of 0.25. At the time of production, it was the most aerodynamic production car to be built.

The gasoline engine is a 67 hp (50 kW; 68 PS), 1.0-liter, ECA series 3-cylinder unit providing lean burn operation with an air-to-fuel ratio that can reach 25.8 to 1. The engine uses lightweight aluminum, magnesium, and plastic to minimize weight. The electrical motor assist adds another 10 kW (13 hp) (at 3000 rpm) and a maximum of 36 pound-feet (49 Nm) of torque when called on, resulting in 73 hp (54 kW; 74 PS) at 5700 rpm and 91 foot-pounds force (123 N⋅m) of torque at 2000 rpm, with the aim to boost performance to the level of a typical 1.5 L gasoline engine. It also acts as a generator during deceleration and braking to recharge the vehicle's batteries, and as the Insight's starter motor.[17] (This improves fuel efficiency and extends the lifetime and fade resistance of the brakes, without adding unsprung weight). When the car is not moving, for example at a stop light, the engine shuts off. Power steering is electric, reducing accessory drag.

The Insight uses the first generation of Honda's Integrated Motor Assist (IMA) hybrid technology. (The next generation, used in the Honda Civic Hybrid, is much more space-efficient.) The Insight's electric assist is an ultrathin 60 mm (about 2.4 inches) brushless 10-kW electric motor located on the crankshaft. Located behind the seats are a series of 120 commercial grade "D" sized 1.2 V NiMH batteries wired to provide a nominal 144 V DC and a capacity of 6.5 AH. During heavy acceleration, the NiMH batteries drive the electric motor, providing additional power; during deceleration, the motor acts as a generator and recharges the batteries using a process called regenerative braking. A computer control module regulates how much power comes from the internal combustion engine, and how much from the electric motor; in the CVT variant, it also finds the optimal gear ratio. The digital displays on the dashboard display fuel consumption instantaneously. On the manual transmission up and down arrows suggest when to shift gears. Dashboard gauges monitor the current battery status, instantaneous fuel consumption, and mode of the electric motor — standby, engine assist or charging the batteries. High pressure (2.6 bars (38 psi) / 2.4 bars (35 psi)), low rolling resistance tires and the use of low viscosity "0W-20" synthetic oil enhance fuel economy.

The original Insight had a conventional manual transmission. Starting with the 2001 model, a CVT variant of the Insight was available; the CVT is similar to that used in the Honda Civic Hybrid and the Honda Logo. A traditional transmission shifts between a fixed set of engine-to-wheel ratios; however, a CVT allows for an infinite set of ratios between its lowest gear and its highest. A feature shared by the two hybrids (and now appearing in others) is the ability to automatically turn off the engine when the vehicle is at a stop (and restart it upon movement). Since it is more powerful than most starters of conventional cars, the Insight's electric motor can start the engine nearly instantaneously. The Integrated Motor Assist is run by an "Intelligent Power Unit (IPU)", a desktop computer-sized box. The Intelligent Power Unit, the Power control Unit, the Electronic Control Unit, the vehicle's batteries, DC-to-DC converter and a high-voltage inverter are all located under the cargo floor of the vehicle, behind the seats.

Honda increased the vehicle's fuel efficiency using aluminum and plastic extensively to reduce the vehicle's weight. The basic structure is a new, lightweight aluminum monocoque, reinforced in key areas with aluminum extrusions joined at cast aluminum lugs. Stamped aluminum panels are welded onto this structure to form an extremely light and rigid platform for the drivetrain and suspension. The Insight has a body weight less than half that of the contemporary Civic 3-door, with increased torsional rigidity by 38% and bending rigidity by 13%.[18] Honda built the Insight with aluminum front brake calipers and rear brake drums, and with a largely aluminum suspension, in addition to standard aluminum wheels; reducing the ratio of un-sprung to sprung weight as well as the total weight. The fuel tank is plastic; the engine mounts are aluminum; and the exhaust is a small, thin wall pipe. Its compact spare is also aluminum. The Insight weighed 1,847 lb (838 kg) in manual transmission form without air conditioning, 1,878 lb (852 kg) with manual transmission and air conditioning, or 1,964 lb (891 kg) with CVT and air conditioning.

The Insight has a coefficient of drag of 0.25. The absence of a rear seat allows the body to taper just behind the driver and the rear track is 110 mm (approximately 4.3 inches) narrower than the front track.

The CVT-equipped Insight is classified as a super-low emissions vehicle. The Insight features low emissions: the California Air Resources Board gave the 5-speed model a ULEV rating, and the CVT model earned a SULEV rating – the 5-speed model's lean-burn ability traded increased efficiency for slightly higher NOx emissions.

The Insight was assembled at the Honda factory in Suzuka, Japan, where the Honda NSX and the Honda S2000 were also assembled. The Insight and the NSX are aluminum-bodied, while the S2000 employs a steel body with aluminum hood.

At the 2003 Tokyo Motor Show, Honda introduced the concept car Honda IMAS, an extremely fuel-efficient and lightweight hybrid car made of aluminum and carbon fiber, which was perceived by most observers to be the future direction where the Insight was heading.

With its aluminum body and frame, the Insight was an expensive car to produce and was never designed for high-volume sales. Instead, it was designed to be a real world test car for hybrid technology and a gauge to new consumer driving habits. With an aerodynamic fuel-saving shape similar to its predecessor, the Honda CR-X, and some unconventional body colors it was a bit more than mainstream car buyers could handle, preferring more conservative styles. Production halted announced in May 2006, with plans announced to replace Insight with a new hybrid car, smaller than the eighth generation Civic, but not earlier than in 2009. Ahead of this announcement, Honda stopped selling Insight in