In September 1995, the "Buddy List" precursor to AIM was launched internally to AOL employees. In March 1996, the Buddy List was opened up to AOL subscribers. The standalone AIM became available to non-subscribers in 1997. The release of AIM came over a decade after AOL's previous QuantumLink incarnation had offered "On-Line Messages" (OLMs) to its subscribers.

Since version 2.0, AIM has included person-to-person instant messaging, chatroom messaging, and the ability to share files Peer-to-peer with one's buddies. Version 4.3 introduced the storing of one's contact list on AOL's servers and allowed for a maximum of 200 buddies to be stored. In addition, in the 4.x versions, the AIM client for Microsoft Windows added the ability to play games against one another using the Wild Tangent engine. The first version released with WildTangent did not warn the user that it was going to be installed. Newer versions do, because many spyware scanners flag the WildTangent software as spyware.

The successor to AIM version 5.9 was originally named AIM Triton. Compared with version 5.9, Triton's programming code was rewritten and featured a brand new UI engine called Boxely. The first beta version of Triton (0.1.12) supported only Windows XP upon its release. For the first time in the development of a new version of AIM, these preliminary versions were made publicly available on the AIM home page for any user to test and provide feedback.

In September 2006, Triton was renamed to AIM 6 and a new beta version was made available. This version slightly changed the UI[citation needed]. The final stable version of AIM 6.0 was released on December 15; new features included connection to AIM Pages, additional customization, and compatibility with address book programs and sites through a "Universal Address Book" powered by Plaxo. Additionally, the upgrade unified away messages and general user updates into RSS feeds and added the ability to send messages to offline users. Certain features that were missing from the previous version were also re-added, such as global font customization and a smaller cache usage, although the Get File function has yet to return. Also new in this release was the opening of AIM to developers, which allowed anyone to create plug-ins or custom AIM clients for Windows, Macintosh, or Linux.

The next version, 6.1, added Buddy List docking, support for inserting images into Buddy Info, the ability to change the highlight colors of the UI, improvements to the displaying of Linked Screen Names, several bug fixes, and improved Windows Vista support.

Version 6.5.11.1 supports status messages (similar to away messages), and has improved cell phone integration.

In version 7.3 for Windows and version 2.1 for Mac OS (both currently in beta), AIM added support for Facebook, allowing users to login using their Facebook ID and chat with their Facebook friends.

The standard protocol that AIM clients use to communicate is called OSCAR. Most AOL-produced versions of AIM and popular third party AIM clients use this protocol. However, AOL also created a simpler protocol called TOC that lacks many of OSCAR's features but is sometimes used for clients that only require basic chat functionality. The TOC/TOC2 protocol specifications were made available by AOL, while OSCAR is a closed protocol that third parties have had to reverse-engineer.

In January 2008, AOL introduced XMPP support for AIM, allowing AIM users to communicate using the standardized, open-source Extensible Messaging and Presence Protocol. However, in March 2008 this service was discontinued.

AIM and AOL use several terms for elements of their instant messaging that are different from other messengers. These include: