Trademarked OSI "keyhole" logo
The organization was founded in late February 1998 by Bruce Perens and Eric S. Raymond, part of a group inspired by the Netscape Communications Corporation publishing the source code for its flagship Netscape Communicator product. Later, in August 1998, the organization added a board of directors.
Raymond was president from its founding until February 2005, followed briefly by Russ Nelson and then Michael Tiemann. In May 2012, the new board elected Simon Phipps as president and in May 2015 Allison Randal was elected as president when Phipps stepped down in preparation for the 2016 end of his Board term. Phipps became President again in September 2017. Molly de Blanc was elected President in May, 2019, followed by Josh Simmons in May, 2020.
The group adopted the Open Source Definition for open-source software, based on the Debian Free Software Guidelines. They also established the Open Source Initiative (OSI) as a steward organization for the movement. However, they were unsuccessful in their attempt to secure a trademark for 'open source' to control the use of the term. In 2008, in an apparent effort to reform governance of the organization, the OSI Board invited 50 individuals to join a "Charter Members" group; by 26 July 2008, 42 of the original invitees had accepted the invitations. The full membership of the Charter Members has never been publicly revealed, and the Charter Members group communicated by way of a closed-subscription mailing list, "osi-discuss", with non-public archives.
In 2012, under the leadership of OSI director and then-president Simon Phipps, the OSI began transitioning towards a membership-based governance structure. The OSI initiated an Affiliate Membership program for "government-recognized non-profit charitable and not-for-profit industry associations and academic institutions anywhere in the world". Subsequently, the OSI announced an Individual Membership program and listed a number of Corporate Sponsors. As of 2020, Microsoft is listed as a corporate sponsor.
On November 8, 2013, OSI appointed Patrick Masson as its General Manager.
In January 2020, Bruce Perens left OSI over controversy regarding a license.
A few months later, Perens declared on social media:
"We created a tower of babel of licenses. We did not design-in license compliance and we have a tremendous noncompliance problem that isn't getting better. We did not design a good framework for where proprietary software can go, and where it never should. Our license loopholes are exploited."
After Bruce Perens' exit, Eric Raymond, co-founder of the OSI was banned from the OSI in March 2020.  "Specifically, Raymond was banned from the mailing lists used to organize and communicate with the OSI. For an organization to ban their founder from communicating with the group (such as via a mailing list) is a noteworthy move."
Both the modern free software movement and the Open Source Initiative were born from a common history of Unix, Internet free software, and the hacker culture, but their basic goals and philosophy differ.[how?] The Open Source Initiative chose the term "open source," in founding member Michael Tiemann's words, to "dump the moralizing and confrontational attitude that had been associated with 'free software'" and instead promote open source ideas on "pragmatic, business-case grounds."
As early as 1999, OSI co-founder Perens objected to the "schism" that was developing between supporters of the Free Software Foundation (FSF) and the OSI because of their disparate approaches. (Perens had hoped the OSI would merely serve as an "introduction" to FSF principles for "non-hackers.") Richard Stallman of FSF has sharply criticized the OSI for its pragmatic focus and for ignoring what he considers the central "ethical imperative" and emphasis on "freedom" underlying free software as he defines it. Nevertheless, Stallman has described his free software movement and the Open Source Initiative as separate camps within the same broad free-software community and acknowledged that despite philosophical differences, proponents of open source and free software "often work together on practical projects."
As of April 2020, the Open Source Initiative board of Directors is:
Past board members include: