In the late '70s, prior to joining the NASCAR circuit, Wallace made a name for himself racing around the Midwest winning a pair of local track championships. Rusty won more than 200 short track races. In 1979 he won United States Auto Club's (USAC) Stock Car Rookie of the Year honors, behind A.J. Foyt and Bay Darnell.[2] He finished second in USAC Stock Car in 1981 behind Joe Ruttman.[2]

In 1983 he won the American Speed Association (ASA) championship while competing against some of NASCAR's future stars like Mark Martin, 1992 NASCAR Champion Alan Kulwicki and Dick Trickle.

Wallace finished second in his first NASCAR race at Atlanta 500 in 1980, having started 7th, driving for Roger Penske in the #16. He made nine further NASCAR appearances over the next three years, although he did not score any further top 10 finishes until he went full-time in 1984. Wallace joined the Winston Cup circuit full-time in 1984, winning NASCAR Rookie of the Year honors and finishing 14th in the final points standings. He raced in the #88 Gatorade Pontiac for Cliff Stewart with the best finish of 4th in 30 races, along with two 5th places and four further top 10's. Wallace stayed with Cliff Stewart for 1985, but this time in the #2 Alugard Pontiac. In 29 races, Rusty had 2 top 5's 8 top 10's.

For 1986 he switched teams to the #27 Alugard Pontiac for Raymond Beadle's Blue Max Racing team. Rusty's first win came on April 6, 1986, at Bristol Motor Speedway.[1] He also won at Martinsville on September 21. He finished the year with 2 wins, 4 top 5's and 16 top 10's in 29 races. Wallace finished 6th in the points, his first top 10 in the standings.

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