Open source programs make their source code freely available for anyone to use, modify or redistribute, with no demands for the payment of fees or royalties. They are usually written and developed as a collaborative effort using peer production; a voluntary system using the co-operation of many unpaid individuals.

One of the earliest examples of source code being made freely available to the public was IBM's CP/CMS, which was distributed to customers at no cost in the late 1960s and early 1970s. Many users modified the original source code and shared their changes with others by using SHARE. This was a voluntary group founded in 1955 to support IBM mainframe computers.

When BASIC computer language was developed in the 1980s, some open source programs were shared on Bulletin Board System (BBS) networks. Some BBS boards, such as Wayne Bell's WWIV, were set up to specifically enable modifications to be made to programs. Much of the software shared on BBS was shareware, however, which differed from open source in that it typically had more restrictive licences, additional features that were not available for free but could only be accessed after payment, and free access for only a limited time.

As the Internet developed, sharing of source code continued with Usenet, irc, gopher and UUCP. Both Linux and BSD were initially distributed on Usenet. The term 'open source' was first coined in early 1998 by members of the free software movement in Palo Alto, California, and later in the year a "Freeware Summit" was arranged, which was attended by many of the most influential people involved in open source projects. A press conference was held after the event, during which the use of the term open source was first publicised. Many of the most popular and widely used operating systems, applications and programs available today are open source.

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Linux is a widely used operating system that was developed in 1991 by Linus Torvalds, a Finnish university student. The first version was freely modifiable but had a licence restricting commercial use. Linux was relicenced in 1992 using the GNU General Public License (GPL) to make it fully open source, and is still being modified today, with Torvalds supervising code changes to the latest kernel versions. GNOME and KDE are two very popular open source graphical user interfaces (GUI) that have the power of changing the user experience. They are available for Linux and other platforms, including Microsoft Windows.

The most popular HTTP web server software program in use today, Apache, is open source. Originally written by Robert McCool in 1995, it is constantly maintained and developed by a community of volunteers, overseen by the Apache Software Foundation. This is a non-profit organization, set up to support Apache projects.

Another influential open source project, Mozilla, was started by Netscape Communications Corporation in 1998 to coordinate the creation of an open source version of internet software that Netscape were developing. In 2003 the Mozilla Foundation took over the project, and currently the Mozilla community has over 40,000 contributors, both paid and voluntary. A web browser, Firefox, was developed, and has become the third most popular web browser worldwide. Mozilla obtains over two thirds of their revenue from Google, resulting from a regularly renewed deal making them the default search engine in Firefox.