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. Universal acquired a 50% stake in Bad Boy Entertainment for $30 million in February of 2003. 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.

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. The catalog remained with Warner Music Group.

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