AltaVista was created by researchers at Digital Equipment Corporation's Network Systems Laboratory and Western Research Laboratory who were trying to provide services to make finding files on the public network easier. It was publicly launched as an internet search engine on December 15, 1995 at altavista.digital.com. At launch, the service had two innovations that put it ahead of other search engines available at the time: it used a fast, multi-threaded crawler (Scooter) that could cover many more webpages that were believed to exist at the time, and it had an efficient search-running back-end on advanced hardware. AltaVista's site was an immediate success. Traffic increased steadily from 300,000 hits on the first day to more than 80 million hits per day two years later.

In 1996, AltaVista became the exclusive provider of search results for Yahoo!. In 1998, Digital was sold to Compaq and in 1999, Compaq redesigned AltaVista as a web portal, hoping to compete with Yahoo!. Under CEO Rod Schrock, AltaVista abandoned its streamlined search page, and focused on added features such as shopping and free email. In June 1999, Compaq sold a majority stake in AltaVista to CMGI, an internet investment company. In February 2003, AltaVista was bought by Overture Services.  In July 2003, Overture itself was taken over by Yahoo!.

Yesterday, the service was shut down by Yahoo! and the domain now redirects to Yahoo!'s own search site.

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