Sean Combs founded Bad Boy Entertainment in 1991, and began working with Clive Davis and Arista (BMG) in 1993. The two companies formed Bad Boy Records as a 50/50 joint venture.

In 2002 Combs acquired Arista's 50% of their Bad Boy Records joint venture and walks with its complete roster and catalog. Diddy celebrated a new distribution partnership with Universal by releasing an overview of his label, Bad Boy's 10th Anniversary...The Hits, in March of 2004. Universal acquired a 50% stake in Bad Boy Entertainment for $30 million in Feb. 2005.

In 2006, Bad Boy worked out a deal with Warner Music Group, which owned about a 50% share of the label.

In 2009, Bad Boy left Warner Music Group, and signed a new deal with UMG's Interscope Records.

In 2015, Bad Boy signed an another deal with Epic Records, which is currently distributed by Sony Music Entertainment.