Chad Hurley earned a B.A. in Fine Art from Indiana University of Pennsylvania in 1999.

Hurley and Chen said that the original idea for YouTube was a video version of an online dating service, and had been influenced by the website Hot or Not. They created posts on Craigslist asking attractive females to upload videos of themselves to YouTube in exchange for a $100 reward.

Jawed Karim attended the University of Illinois at Urbana-Champaign.

At the University of Illinois at Urbana-Champaign, Steve Chen studied computer science. He graduated in 2002.

Karim said the inspiration for YouTube first came from Janet Jackson's role in 2004 Super Bowl incident when her breast was exposed during her performance, and later from the 2004 Indian Ocean tsunami. Karim could not easily find video clips of either event online, which led to the idea of a video sharing site.

According to a story that has often been repeated in the media, Hurley and Chen developed the idea for YouTube during the early months of 2005, after they had experienced difficulty sharing videos that had been shot at a dinner party at Chen's apartment in San Francisco. Karim did not attend the party and denied that it had occurred, but Chen commented that the idea that YouTube was founded after a dinner party "was probably very strengthened by marketing ideas around creating a story that was very digestible".

YouTube was founded by Steve Chen, Chad Hurley, and Jawed Karim, who were all early employees of PayPal. YouTube's early headquarters were situated above a pizzeria and Japanese restaurant in San Mateo, California.

The first YouTube video, titled Me at the zoo, shows co-founder Jawed Karim at the San Diego Zoo. The video was uploaded on April 23, 2005, and can still be viewed on the site.

YouTube offered the public a beta test of the site in May 2005.

YouTube began as a venture capital–funded technology startup, primarily from an $11.5 million investment by Sequoia Capital and an $8 million investment from Artis Capital Management between November 2005 and April 2006.

The first video to reach one million views was a Nike advertisement featuring Ronaldinho in November 2005.

Following a $3.5 million investment from Sequoia Capital in November, the site launched officially on December 15, 2005, by which time the site was receiving 8 million views a day.

The week of YouTube's launch, NBC-Universal's Saturday Night Live ran a skit "Lazy Sunday" by The Lonely Island. Besides helping to bolster ratings and long-term viewership for Saturday Night Live, "Lazy Sunday"'s status as an early viral video helped established YouTube as an important website. Unofficial uploads of the skit to YouTube drew in more than five million collective views by February 2006 before they were removed at request of NBC-Universal about two months later, raising questions of copyright-related to viral content.

The site grew rapidly and, in July 2006, the company announced that more than 65,000 new videos were being uploaded every day, and that the site was receiving 100 million video views per day.

On October 9, 2006, Google announced that it had acquired YouTube for $1.65 billion in Google stock.

In October 2006, YouTube moved to a new office in San Bruno, California.

The deal with Google was finalized on November 13, 2006.

The choice of the name www.youtube.com led to problems for a similarly named website, www.utube.com. The site's owner, Universal Tube & Rollform Equipment, filed a lawsuit against YouTube in November 2006 after being regularly overloaded by people looking for YouTube. Universal Tube has since changed the name of its website to www.utubeonline.com.

In June 2007, YouTube added an option to watch videos in 3GP format on mobile phones.

Most modern smartphones are capable of accessing YouTube videos, either within an application or through an optimized website. YouTube Mobile was launched in June 2007, using RTSP streaming for the video. Not all of YouTube's videos are available on the mobile version of the site.

Since June 2007, YouTube's videos have been available for viewing on a range of Apple products. This required YouTube's content to be transcoded into Apple's preferred video standard, H.264, a process that took several months. YouTube videos can be viewed on devices including Apple TV, iPod Touch and the iPhone.

In March 2008, a high-quality mode was added, which increased the resolution to 480×360 pixels.

It has been claimed, by The Daily Telegraph in 2008, that in 2007, YouTube consumed as much bandwidth as the entire Internet in 2000.

A TiVo service update in July 2008 allowed the system to search and play YouTube videos.

In December 2008, 720p HD support was added. At the time of the 720p launch, the YouTube player was changed from a 4:3 aspect ratio to a widescreen 16:9.

In January 2009, YouTube launched "YouTube for TV", a version of the website tailored for set-top boxes and other TV-based media devices with web browsers, initially allowing its videos to be viewed on the PlayStation 3 and Wii video game consoles.

In June 2009, YouTube XL was introduced, which has a simplified interface designed for viewing on a standard television screen. YouTube is also available as an app on Xbox Live.

In November 2009, 1080p HD support was added.

In January 2010, YouTube launched an experimental version of the site that used the built-in multimedia capabilities of web browsers supporting the HTML5 standard. This allowed videos to be viewed without requiring Adobe Flash Player or any other plug-in to be installed. The YouTube site had a page that allowed supported browsers to opt into the HTML5 trial. Only browsers that supported HTML5 Video using the MP4 (with H.264 video) or WebM (with VP8 video) formats could play the videos, and not all videos on the site were available.

In March 2010, YouTube began free streaming of certain content, including 60 cricket matches of the Indian Premier League. According to YouTube, this was the first worldwide free online broadcast of a major sporting event.

On March 31, 2010, the YouTube website launched a new design, with the aim of simplifying the interface and increasing the time users spend on the site.

According to data published by market research company comScore, YouTube is the dominant provider of online video in the United States, with a market share of around 43% and more than 14 billion views of videos in May 2010.

In May 2010, YouTube videos were watched more than two billion times per day.

In July 2010, YouTube announced that it had launched a range of videos in 4K format, which allows a resolution of up to 4096×3072 pixels.

In October 2010, Hurley announced that he would be stepping down as a chief executive officer of YouTube to take an advisory role, and that Salar Kamangar would take over as head of the company.

In April 2011, James Zern, a YouTube software engineer, revealed that 30% of videos accounted for 99% of views on the site.

YouTube videos were watched by more than three billion times per day in May 2011.

In May 2011, 48 hours of new videos were uploaded to the site every minute.

In November 2011, the Google+ social networking site was integrated directly with YouTube and the Chrome web browser, allowing YouTube videos to be viewed from within the Google+ interface.

In December 2011, YouTube launched a new version of the site interface, with the video channels displayed in a central column on the home page, similar to the news feeds of social networking sites. At the same time, a new version of the YouTube logo was introduced with a darker shade of red, the first change in design since October 2006.

YouTube videos were watched more than four billion times per day.

60 hours of new videos were uploaded to the site every minute.

As of January 2012, the site had 800 million unique users a month.

In September 2012, YouTube launched its first app for the iPhone, following the decision to drop YouTube as one of the preloaded apps in the iPhone 5 and iOS 6 operating system.

100 hours of new videos were uploaded to the site every minute.

In May 2013, YouTube launched a pilot program for content providers to offer premium, subscription-based channels within the platform.

In February 2014, Susan Wojcicki was appointed CEO of YouTube.

In June 2014, YouTube began to deploy support for high frame rate videos up to 60 frames per second (as opposed to 30 before), becoming available for user uploads in October. YouTube stated that this would enhance "motion-intensive" videos, such as video game footage.

300 hours of new videos were uploaded to the site every minute.

In November 2014, YouTube announced a subscription service known as "Music Key," which bundled ad-free streaming of music content on YouTube with the existing Google Play Music service.

In January 2015, Google announced that 360-degree video would be natively supported on YouTube.

On January 27, 2015, YouTube announced that HTML5 would be the default playback method on supported browsers. YouTube used to employ Adobe Dynamic Streaming for Flash, but with the switch to HTML5 video now streams video using Dynamic Adaptive Streaming over HTTP (MPEG-DASH), an adaptive bit-rate HTTP-based streaming solution optimizing the bitrate and quality for the available network.

In February 2015, YouTube released a secondary mobile app known as YouTube Kids. The app is designed to provide an experience optimized for children. It features a simplified user interface, curated selections of channels featuring age-appropriate content, and parental control features.

On March 13, 2015, YouTube enabled 360° videos which can be viewed from Google Cardboard, a virtual reality system. YouTube 360 can also be viewed from all other virtual reality headsets. Live streaming of 360° video at up to 4K resolution is also supported.

In March 2015, support for 4K resolution was added, with the videos playing at 3840 × 2160 pixels.

In June 2015, support for 8K resolution was added, with the videos playing at 7680×4320 pixels.

Later on August 26, 2015, YouTube launched YouTube Gaming—a video gaming-oriented vertical and app for videos and live streaming, intended to compete with the Amazon.com-owned Twitch.

In October 2015, YouTube announced YouTube Red (now YouTube Premium), a new premium service that would offer ad-free access to all content on the platform (succeeding the Music Key service released the previous year), premium original series, and films produced by YouTube personalities, as well as background playback of content on mobile devices. YouTube also released YouTube Music, a third app oriented towards streaming and discovering the music content hosted on the YouTube platform.

In January 2016, YouTube expanded its headquarters in San Bruno by purchasing an office park for $215 million. The complex has 51,468 square metres (554,000 square feet) of space and can house up to 2,800 employees.

In November 2016, support for HDR video was added which can be encoded with Hybrid Log-Gamma (HLG) or Perceptual Quantizer (PQ). HDR video can be encoded with the Rec. 2020 color space.

In February 2017, one billion hours of YouTube were watched every day.

400 hours of new videos were uploaded to the site every minute.

On August 29, 2017, YouTube officially launched the "polymer" redesign of its user interfaces based on Material Design language as its default, as well a redesigned logo that is built around the service's play button emblem.

In 2017, YouTube began to promote an alternative stereoscopic video format known as VR180, which is limited to a 180-degree field of view but is promoted as being easier to produce than 360-degree video and allowing more depth to be maintained by not subjecting the video to equirectangular projection.

On April 3, 2018, a shooting took place at YouTube's headquarters in San Bruno, California.

On May 17, 2018, YouTube announced the re-branding of YouTube Red as YouTube Premium (accompanied by a major expansion of the service into Canada and 13 European markets), as well as the upcoming launch of a separate YouTube Music subscription.

In September 2018, YouTube began to phase out the separate YouTube Gaming website and app and introduced a new Gaming portal within the main service. YouTube staff argued that the separate platform was causing confusion and that the integration would allow the features developed for the service (including game-based portals and enhanced discoverability of gaming-related videos and live streaming) to reach a broader audience through the main YouTube website.

By January 2019, YouTube had begun rolling out videos in AV1 format. YouTube primarily uses the VP9 and H.264/MPEG-4 AVC video formats, and the Dynamic Adaptive Streaming over HTTP protocol.

In July 2019, It was announced that YouTube will discontinue support for Nintendo 3DS systems on September 3, 2019. However, owners of New Nintendo 3DS, or New Nintendo 3DS XL, can still access YouTube on the Internet browser.

In November 2019, it was announced that YouTube was gradually phasing out the classic version of its Creator Studio across all users by the spring of 2020.

During the COVID-19 pandemic, when most of the world was under stay-at-home orders, usage of services such as YouTube grew greatly. In response to EU officials requesting that such services reduce bandwidth as to make sure medical entities had sufficient bandwidth to share information, YouTube along with Netflix stated they would reduce streaming quality for at least thirty days as to cut bandwidth use of their services by 25% to comply with the EU's request. YouTube later announced that they will continue with this move worldwide, "We continue to work closely with governments and network operators around the globe to do our part to minimize stress on the system during this unprecedented situation".

As of August 2020, the classic studio is no longer available.