The company was founded in 1993 by Christian v. Koenigsegg, with the intention of producing a world-class supercar. Based on Formula One technology, the car was required to be a two-seater, midengine layout with a hardtop. The initial design was drawn by Christian von Koenigsegg. Then he went with his sketches to Industrial Designer David Crafoord in order for him to realize the sketches into a scale 1:5 model. David then laid his personal touch to design brief and finished the model. This model was later scaled up by Sven-Harry Åkesson in order to create the base plug for the initial Koenigsegg Prototype that was finished in 1996. During the coming years the prototype went through extensive testing and several new prototypes were built.

The first car produced (the CC8S) was delivered in 2002 to a customer. The most recent models are the CCR and CCX.

Von Koenigsegg got the idea to build his own car after watching the Norwegian puppet movie Pinchcliffe Grand Prix in his youth. However, he took his first steps in the world of business in his early 20s running a trading company called Alpraaz in Stockholm, Sweden. The success of this venture gave von Koenigsegg the necessary financial standing to launch his chosen career as a car manufacturer.

A Koenigsegg CC prototype was first publicised in 1997, while the production prototype was finally unveiled at the 2000 Paris Motor Show. The first customer took delivery of a red CC 8S in 2002 at the Geneva Auto Show and four more cars were built that year. Koenigsegg was established in Asia later that year with a premier at the Seoul Auto Show. In 2004, the new CCR was unveiled at the Geneva Auto Show.

On February 22, 2003, one of Koenigsegg's production facilities caught fire and burned to the ground. The fire was extinguished with help from 40 firefighters from different fire departments (Ängelholm, Hjärnarp, Strövelstorp, Bjuv and Helsingborg), villagers from Margretetorp, and passers-by. About 15 Koenigsegg cars, body parts, machines and engines were saved before the fire got out of control. The cause of the fire was determined to be a short-circuit in the company kitchen dishwasher, which then spread to the roof, which was insulated with hay. On the same day, the Koenigsegg cars took refuge at the nearby former Swedish Airforce Base F10, near the town of Ängelholm, which lies in the southwestern-most part of Sweden. After a few days, the decision was made by von Koenigsegg that they would stay within the former wing to rise from the ashes.

The Koenigsegg badge was designed in 1993 by Jacob Låftman, based on the shield of the Koenigsegg family. The shield has been the family's coat of arms since the 12th century when a family member was knighted by the German-based Holy Roman Empire.