CityEngine was developed at ETH Zurich by the original author Pascal Mueller, co-founder and CEO of Procedural Inc. During his PhD research at ETH Computer Vision Lab, Mueller invented a number of ground breaking techniques for the procedural modeling of 3D architectural content which make up the foundation of CityEngine today. In the 2001 Siggraph publication (Procedural Modeling of Cities - Yoav Parish and Pascal Mueller) CityEngine is presented for the first time outside of the research community. Several more research papers have featured CityEngine since then.

In 2008, the first commercial version of CityEngine was released by Swiss company Procedural Inc and is used by professionals in urban planning, architecture,visualization, game development, entertainment, GIS, archeology and cultural heritage.