In late 1974, freshly minted Kodak electrical engineer Steven J. Sasson was charged by his supervisor, Gareth A. Lloyd, to lead a small group to create a filmless camera using the new CCD technology. Texas Instruments Inc. had already designed a filmless, albiet analog-based, electronic camera in 1972 but never commercialized it.

In December 1975, Sasson's team successfully developed the first digital camera, a crude engineering sample capable of capturing 100 x 100 pixel monochrome images. Except the first images of a lab assistant took 23 seconds to record onto a standard data audiocassette.

Sasson and Kodak were beaten to the filmless camera market by Sony, which marketed the Pro Mavica, the first commercial electronic still camera, in 1981. But the Mavica was an analog electronic still camera that used a proprietary two-inch floppy disc to store images. Several other companies announced similar electronic still cameras, but these cameras were either too expensive or their images were of insufficient resolution – often both – to crack the consumer market.

In the mid-1980s, several camera makers introduced multi-thousand dollar electronic still cameras for the professional market including Canon with its RC-701 and Nikon with its QC-1000C. In mid-1987, Sony unveiled a consumer version of its Mavica, the MVC-C1 Hi Band VF Mavica, an analog still camera, not digital, that stored images on two-inch square discs. In September 1988, Fuji unveiled the DS-1P, the first electronic still camera that recorded images digitally on a 16-MB internal memory card developed with Toshiba, but it was never sold in the U.S.

But none of these were true digital cameras.

In the early 1980s, Kodak senior project engineer and the chief designer of the company's professional cameras, James E. McGarvey, led a team that included Sasson, Parulski and Lloyd to develop a megapixel digital camera. The first prototype appeared in 1986 and the first commercial model in 1991, the Kodak DCS (Digital Camera System) 100, a 1.3-megapixel CCD fit into a Nikon film camera body. The DSC 100 is often cited as the first true commercially available digital camera, but it was sold only to well-heeled photojournalists for $10,000 to $20,000, such as reporters covering the first Gulf War who were forced to lug around an 11-pound accessory pack.

Electronic camera makers assumed their eventual consumer cameras would be connected to TV sets to create slide shows, not connected to computers. That assumption changed in 1987 when Letraset introduced Image Studio, the first image manipulation software. But Image Studio was designed only for the Apple Macintosh and handled only grayscale images. In 1990, Adobe released the first version of its now-standard photo manipulation software, PhotoShop, which handled color images. But in many ways, both Image Studio and PhotoShop were applications in search of hardware.

Kodak saw the consumer commercial possibilities of a filmless digital camera connected to a computer and began working with Apple on a consumer-ready version. On February 17, 1994, the Kodak-designed Apple QuickTake 100 was introduced at the Tokyo MacWorld Expo. The QuickTake 100 looked more like a fancy pair of binoculars. It ran on three AA batteries and could store eight 640 x 480 images in its internal solid-state memory or could be connected to a PC via a serial port connection. The Apple QuickTake 100 went on sale in the U.S. in May 1994 (for Macintosh only; the Windows version arrived a month later) for less than $1000, making it the first true consumer digital camera. Kodak followed with its own version, the DC-40, that same spring.

Advances in digital still cameras came fast and furious. In July 1995, Casio's QV-10 was the first digital camera equipped with an LCD screen along with a viewfinder. Kodak's DC-25 was the first digital camera to use removable Compact Flash in 1996. The first million (or mega) pixel models arrived in 1997, and each succeeding year has seen nearly a million pixel increase in resolution, along with USB connectivity and a variety of removable storage media options.

In 2002, cell phones equipped with digital cameras began appearing, and models with megapixel CCDs appeared in 2004, the same year several consumer digital camera makers unveiled 8-megapixel models for less than $1,000.