Blender was developed as an in-house application by the Dutch animation studio NeoGeo and Not a Number Technologies (NaN). It was primarily authored by Ton Roosendaal, who had previously written a ray tracer called Traces for Amiga in 1989. The name "Blender" was inspired by a song by Yello, from the album Baby.^[3]

Roosendaal founded NaN in June 1998 to further develop and distribute the program. The program was initially distributed as shareware until NaN went bankrupt in 2002.

The creditors agreed to release Blender under the terms of the GNU General Public License, for a one-time payment of €100,000 (US$100,670 at the time). On July 18, 2002, a Blender funding campaign was started by Roosendaal in order to collect donations and on September 7, 2002 it was announced that enough funds had been collected and that the Blender source code would be released. Today, Blender is free, open-source software and is, apart from the two half-time employees and the two full-time employees of the Blender Institute, developed by the community.^[4]

The Blender Foundation initially reserved the right to use dual licensing, so that, in addition to GNU GPL, Blender would have been available also under the "Blender License", which did not require disclosing source code but required payments to the Blender Foundation. However, this option was never exercised and was suspended indefinitely in 2005.^[5] Currently, Blender is solely available under GNU GPL.