Malaysian-backed Lotus declared the Malaysian Grand Prix as a breakthrough on Sunday after driver Heikki Kovalainen fought for places with bigger and more established teams.
Kovalainen, formerly with McLaren, traded lap times and battled with drivers from Toro Rosso, Force India and Mercdes, on his way to a final finish in 15th place.
"Our pace was very good at the end, particularly when we were with the leading cars, and we were very close to passing one of the Toro Rossos as we came over the line," said technical boss Mike Gascoyne.
"That shows just how far we have progressed. This weekend has been by far our strongest race performance since we came back into Formula One last year so, for me, it is really good to see the way we are racing again."
Team principal Tony Fernandes, head of Malaysian budget airline AirAsia, agreed that it was a landmark weekend, despite clutch problems for its other driver, Jarno Trulli.
"Well I think we can officially say we were racing today," he said.
"It was a real shame about Jarno as I really wanted two cars to come home, but Heikki drove a fantastic race and it is exciting that he was really pushing the Toro Rossos in the final few laps."
He added: "He kept pace with cars that were much faster than us during qualifying so I'm thrilled that we have recorded 15th at what was a very tough circuit, so huge congratulations to the whole team and well done to everyone."
Lotus are starting their second season after consistently finishing in the final six last year.