Korean Air began in 1962 as Korean Air Lines and was owned by the South Korean Government. It replaced the former Korean carrier Korean National Airlines. In 1969 KAL was acquired by the Hanjin Transport Group and became privately owned. International flights to Hong Kong, Taiwan, and Los Angeles were flown with Boeing 707s until the introduction of Boeing 747 in 1973. In 1973, KAL introduced Boeing 747s on their Pacific routes and started a European service to Paris using the 707 and DC-10. KAL was also Airbus's first customer outside Europe. On September 1, 1983, Korean Air Lines Flight 007, also known as KAL 007 or KE007, was shot down by Soviet jet interceptors just west of Sakhalin Island. It was carrying 269 passengers and crew at the time, including U.S. congressman Lawrence McDonald. There were no survivors. The Soviet Union stated it did not know the aircraft was civilian and suggested it had entered Soviet airspace as a deliberate provocation to test their response capabilities.

A blue-top livery was introduced on 1 March 1984 and the airline's name changed to Korean Air from Korean Airlines (However this name is still used in official documents). This livery was first introduced in its Fokker F28. It was designed in corporation between Korean Air and Boeing. In 1990s Korean Air became the first airline to use the new MD-11 to supplement its new fleet of Boeing 747-400s. However, MD-11 did not meet the set performance. So its MD-11 were converted to freighters (in addition to 747 freighters). In 1998, an economic recession hit South Korea, which resulted in large reductions in flights and the number of destinations, including destinations such as Abu Dhabi, Jeddah and Madrid. Currently, Korean Air flies to the most US destinations of any Asian carrier (10 passenger cities in the 50 states). Korean Air currently owns 25% of Okay Airways, a Tianjin, PRC-based airline. Korean Air also has in mind of creating another hub in China. At around 1997, Korean Air founded KAL Catering, the creation caused Korean Air to withdrew its contracts with LSG Sky Chefs and create a new contract with servair.

In October 2006, Korean Air won top honors in the TIME Readers’ Travel Choice Awards 2006 as the Best First/Business Class Airline and the Best Frequent Flyer Program for its Skypass program. The South Korean flagship carrier beat strong international competitors and gained overwhelming support from the readers of TIME magazine to win these categories for the first time. Korean Air was also ranked second in the Preferred Airline category. TIME Magazine conducted the TIME Readers’ Travel Choice Awards 2006 poll from April 24 to June 25, 2006. Korean Air (KSE: 003490) is the largest airline based in South Korea. One of the largest airlines in Asia, it operates a network that links Europe, Africa, Asia, Australia, North America, and formerly, South America, to its hub at Incheon International Airport and its domestic hub at Gimpo International Airport (formerly Kimpo International Airport). The airline competes with the smaller, younger fleet of Asiana Airlines.

In recent years, Korean Air has upgraded its fleet and services and has won international acclaimation and awards. With its excellent financial performance in 2005, Korean Air received the "Phoenix Award" from Air Transport World (ATW) for its success in overcoming challenges in the global airline industry. It has been named one of Asia's best airlines by Time readers and twice has won the coveted Mercury Award for its inflight catering. Korean Air has a major air cargo operation, Korean Air Cargo, which overtook Lufthansa in 2005 as the world's largest air cargo business.

Unique to other airlines, Korean Air is also involved in aerospace research and manufacturing. The division, known as the Korean Air Aerospace Division (KAA), manufactures licensed versions of the MD 500 and UH-60 Black Hawk helicopters and the F-5E/F Tiger II fighter aircraft, the aft fuselage and wings for the KF-16 fighter aircraft manufactured by Korean Aerospace Industries, and parts for various commercial aircraft including the Boeing 737, 747, 777, and the Airbus A330, A340, and A380. KAA also provides aircraft maintenance support for the United States Department of Defense in Asia and maintains a research division with focuses on launch vehicle, satellite, commercial and military aircraft, helicopter, and simulation systems.