The company was founded in 1917 by Henry M. Leland. Leland, one of the founders of Cadillac (originally the Henry Ford Company), left the Cadillac division of General Motors during World War I and formed the Lincoln Motor Company to build Liberty aircraft engines. After the war, the company's factories were retooled to manufacture luxury automobiles.

The company encountered severe financial troubles during the transition, and was consequently bought by Ford Motor Company in 1922, who still owns and manufactures cars under the Lincoln marque in its Lincoln-Mercury division. The purchase of Lincoln was a personal triumph for Ford who had been forced out of his second (after Detroit Automobile Company) company by a group of investors led by Leland. Ford's company, renamed Cadillac in 1902 and purchased by rival General Motors in 1909, was Lincoln's chief competitor. Lincoln quickly became one of America's top selling luxury brands alongside Cadillac and Packard. In 1927, Lincoln adopted the greyhound as their emblem, which was later replaced with diamond that is currently in use.

In 1932, Lincoln introduced the V12-powered KB. The same year, Eugene T. "Bob" Gregorie (1908-2002), at the styling studio created by Edsel Ford, began designing what became the Continental, eventually the most important car made by Lincoln. It started as a one-off project car for Edsel, who wanted a European-style car unlike the boxier designs his father's company produced, to drive around on vacations in Florida.

The Zephyr gave Gregorie his chance. Introduced for the 1936 model year, the sportier Zephyr featured a 4.4 liter (267in³) V12, and was so successful it almost became a brand name, rather than just a model. Its first year increased Lincoln sales almost nine-fold. Gregorie simply sectioned a 1938 Zephyr Coupé 10cm (4"), allowing most of the existing dies and tooling to be retained (a trick that would be repeated in the 1953 Buick Skylark), adding the hallmark vertically-mounted spare tire. This became the Continental, eventually the most important car made by Lincoln; by the time it ended production in 1948, 5322 were built, almost entirely by hand. The Zephyr, on which it was based, stopped production in early 1942 when Ford converted to war work, and was not revived. The Continental's spare tire mount was so distinctive, those who work on custom cars still call adding a similar mount a "Continental kit".

The Continental Mark II revived the concept. It was produced by the short-lived Continental division from April 1955 to July 1956 before it was returned to the Lincoln marque. The Mark II had a basic list price of $10,000, the same as a Rolls-Royce that year. The Edsel division merged with Lincoln-Mercury in January 1958 to form the Mercury-Edsel-Lincoln division until the Edsel was discontinued in 1960.

The Continental became Lincoln's flagship model until 1981 when the Town Car, previously the Continental's top trim level, became its own model and took over that role.

As recently as 1998 Lincoln was the best-selling luxury brand in the United States, helped by the massive success of the Navigator SUV, and a redesign of the Town Car as well as the Continental. The company was also part of the Premier Automotive Group from 1998 to 2002, but was pulled out due to Ford's new marketing strategy to separate its "import" brands from its domestic marques. In recent years, however, the company has fallen behind Japanese, European, and American competitors for a lack of new models. The company is working to remedy this, however, and is sharing parts and platforms with other Ford divisions worldwide in an attempt to bring more new models to market faster. The company promises five new models in the four years 2004-2008, and has already begun with the new 2006 Mark LT pickup, Zephyr (upgraded and renamed Lincoln MKZ for the 2007 model year) and the MKX Crossover SUV.

Lincoln vehicles are currently available in the United States, Canada, Mexico, Puerto Rico, U.S. Virgin Islands, South Korea, and the Middle East.