Ariane was the centrepiece of the European Space Agency (ESA) during its early years. In the 1960s and early 1970s, Europe had two separate space organizations. The European Space Research Organization (ESRO) coordinated space projects, and the European Launch Development Organization (ELDO) coordinated the development of a European rocket known as Europa. But after 11 straight failures, European government leaders declared Europa a failure. European officials were frustrated by their inability to launch satellites on their own rocket and had to ask the Americans to launch their satellites for them.

French politicians in particular wanted a space launch capability independent of the United States, but the participants in both European organizations realized that they were too fractured and should be combined. What helped solidify European government opinion was a decision by the United States to not allow European communications satellites to be launched on American rockets without severe restrictions as to where and how they could be operated. The United States government wanted to prevent Europe from building communications satellites that would compete with American satellites.

In 1973, European government officials met and agreed to create a new European Space Agency, which came into existence in 1975. The new agency, composed of 12 member countries, would cooperate on both space and rocket development projects. The major countries in the agency each wanted to develop specific projects: Germany wanted a lead role in the U.S. Spacelab program to develop a human-tended laboratory for the Space Shuttle; Britain wanted a maritime communications satellite, and France wanted a new booster to ensure European independence from the United States. France got approval for the rocket, named Ariane, and created a company known as Arianespace to build it. Arianespace became the first public commercial space launch company in March 1980.

 
Ariane 1, March 4, 1984, payload was Intelsat V F8.

The Ariane-1 launcher, which started development in 1973, was a relatively conservative design. It used nitrogen tetroxide and unsymmetrical dimethyl hydrazine (UDMH) as propellants for the first and second stages. These propellants ignited instantly upon coming in contact with each other. The rocket used the powerful and difficult to develop liquid oxygen and hydrogen combination for the third stage. The rocket could place 3,748 pounds (1,700 kg) into a geostationary transfer orbit (GTO, an orbit from which a satellite would then enter geostationary orbit, or GEO). On Christmas Eve 1979, the first Ariane-1 rocket lifted off its pad in Kourou, French Guiana, on the east coast of South America. Arianespace had picked the launch site because rockets could be launched to the east over ocean without danger of falling on any islands and because it was close to the equator. Being close to the equator meant that the rocket would pick up additional velocity from the Earth's rotation compared to launch sites farther north, like Cape Canaveral in Florida.

 
Ariane 2, November 20, 1987, payload was TV Sat 1.

The upgraded Ariane-2 entered service in 1983 followed by the Ariane-3 in 1984. Ariane-3 added two solid-propellant strap-on rockets to the main core stage. In 1989, the Ariane-4 entered service, capable of being equipped with up to four strap-on booster rockets. Following the Space Shuttle Challenger disaster, the United States ceased allowing commercial satellites to fly on the Shuttle, thereby pushing many customers to Arianespace, which gained a dominant part of the commercial market and never relinquished it. Only during the 1990s did serious competition to Ariane emerge.

Most Ariane launches carry two communication satellites into orbit. One commercial communications satellite sits atop the other, mounted on an adapter known as SPELDA. Although this presents more scheduling problems for the commercial satellite customer, Arianespace has overcome this drawback through other benefits and services. Industry analysts note that although Ariane may not be the cheapest launch vehicle available, even in the dual launch configuration, Arianespace's customer service and flexibility—such as a launch range free of other military or human spaceflight launches—makes it a highly-effective competitor.

 
The AR 40 core vehicle version of Ariane 4 lifts off from the launch zone at Europeďs Spaceport in a daytime mission. An array of cladding, which provides pre-launch thermal protection for the second stage propellant tanks, is seen as it separates from the Ariane in a planned jettison procedure.

By the mid-1980s, even as they were developing the Ariane-4, Arianespace officials wanted to build a larger rocket called the Ariane-5, capable of launching much bigger payloads than the Ariane-4. Their initial plans were for an upgraded version of the Ariane-4, particularly with a more powerful upper stage. But around this same time French officials were seeking to develop an independent European human spaceflight capability. They wanted a reusable spaceplane, a mini-Shuttle called Hermes capable of carrying humans to orbit, either to conduct research or to visit an orbiting space station. In 1985, after French officials decided that they could not develop the reusable spaceplane on their own, they asked ESA to support it as a joint program. ESA tentatively approved Hermes and it had an immediate effect upon plans for the Ariane 5 rocket causing it to increase in size dramatically.

 
Ariane-5 schematic.

Ariane-5 development continued through the latter 1980s, while plans for Hermes fluctuated dramatically. A payload bay was removed, the size of its crew cabin increased, an airlock and docking tunnel was added, an emergency escape system was added and removed, and its overall size and weight changed numerous times. In 1992, after the expenditure of approximately $2 billion but with the construction of no flight hardware, ESA cancelled the Hermes space-plane. Ariane-5 was continued, however, because Arianespace officials expected communications satellites to continue to get larger and realized that Ariane-4 was not big enough to continue launching two satellites at a time. Ariane-5 had a much larger core stage than its predecessors and two large solid-propellant strap-on rocket boosters similar to that used by the Titan III and IV.

 
Ariane 5 (Flight 138) lifts off carrying the Astra 2D, GE 8, and LDREX spacecraft. This flight was the last flight of 2000.

The first launch of Ariane-5 took place on June 4, 1996. ESA and the French space agency released a classically bureaucratic press release after the launch stating that “the first Ariane-5 flight did not result in validation of Europe's new launcher.” The reality was that the rocket had exploded soon after lift-off; it pitched over in flight and erupted in a fireball. This failure resulted in the destruction of the Cluster mission of four space physics satellites. Investigators soon determined that the failure was caused by a software mistake; designers had used much of Ariane-4's software for Ariane-5 and did not properly account for the rocket's different acceleration and flight path. Cluster was later revived as a project called Phoenix and this time launched on two separate Russian Soyuz rockets.