PHP was written as a set of Common Gateway Interface (CGI) binaries in the C programming language by the Danish/Greenlandic programmer Rasmus Lerdorf in 1994, to replace a small set of Perl scripts he had been using to maintain his personal homepage. Lerdorf initially created PHP to display his résumé and to collect certain data, such as how much traffic his page was receiving. Personal Home Page Tools was publicly released on 8 June 1995 after Lerdorf combined it with his own Form Interpreter to create PHP/FI (this release is considered PHP version 2).

Zeev Suraski and Andi Gutmans, two Israeli developers at the Technion IIT, rewrote the parser in 1997 and formed the base of PHP 3, changing the language's name to the recursive initialism PHP: Hypertext Preprocessor. The development team officially released PHP/FI 2 in November 1997 after months of beta testing. Public testing of PHP 3 began and the official launch came in June 1998. Suraski and Gutmans then started a new rewrite of PHP's core, producing the Zend Engine in 1999. They also founded Zend Technologies in Ramat Gan, Israel, which actively manages the development of PHP.

In May 2000, PHP 4, powered by the Zend Engine 1.0, was released. The most recent update released by The PHP Group, is for the older PHP version 4 code branch which, as of October 2007, is up to version 4.4.7. PHP 4 will be supported by security updates until August 8, 2008.

On July 13, 2004, PHP 5 was released powered by the new Zend Engine II. PHP 5 included new features such as:

Improved support for object-oriented programming

The PHP Data Objects extension, which defines a lightweight and consistent interface for accessing databases

Performance enhancements

Better support for MySQL and MSSQL

Embedded support for SQLite

Integrated SOAP support

Data iterators

Error handling via exceptions

Currently, two major versions of PHP are being actively developed: 5.x and 4.4.x. The latest stable version, PHP 5.2.4, was released on Aug 30, 2007. On July 13, 2007, the PHP group announced that active development on PHP4 will cease by December 31, 2007, however, critical security updates will be provided until August 8, 2008. PHP 6 is currently under development, and is slated to release in conjunction with the decommission of PHP 4.