Downey, 61, of County Donegal, who was detained at Gatwick Airport Sunday while on his way to a vacation in Spain, was remanded into custody during a brief initial appearance in Westminster Magistrates' Court, The Irish Times reported.
Prosecutors alleged Downey was responsible for the car bomb that killed members of the Royal Household Cavalry -- Roy John Bright, Dennis Richard Anthony Daly, Simon Andrew Tipper and Geoffrey Vernon Young -- as they traveled from their barracks to Buckingham Palace.
Besides the murder counts, Downey is charged with intending to cause an explosion likely to endanger life.
Sinn Fein's Gerry Kelly said Downey was a member of the Irish Republican political party who has been "a longtime supporter of the peace process." Kelly called his arrest "vindictive, unnecessary and unhelpful."
"Despite traveling to England on many occasions, now six years on he finds himself before the courts on these historic charges," said Kelly, who served time for four bombings in Britain in the early 1970s.
The BBC reported the case was sent to the Old Bailey for a bail hearing Friday and a preliminary hearing June 5.
The bomb Downey allegedly planted was the first of two that exploded the same day, killing a total of 11 people and injuring 50 others, the network noted.