Fendi began in 1918 when Adele Casagrande opened a leather and fur shop in Via del Plebiscito in central Rome. When Adele married Edoardo Fendi in 1925, they made a decision to change the name to Fendi. The business prospered, and a new shop was opened in Via Piave in 1932. By 1946 Paola, 15, the eldest of the couple's five daughters, went to work for the firm, followed by her sisters Carla, Anna, Franca, and Alda. In time each of the daughters would inherit 20% of the company.

In 1962 the Fendis signed up German designer Karl Lagerfeld. Lagerfeld immediately created the inverted FF logo that joined the growing list of international status symbols, and then set about, aided and abetted by the sisters, to revolutionize the treatment of fur and other clothing.

Marvin Traub, president of Bloomingdale's, discovered Fendi's leather goods and introduced them to the United States. Other outlets soon followed, and today Fendi is largely represented through high-end department stores.

In 1969 Fendi presented its first ready-to-wear fur collection at Palazzo Pitti in Florence, bringing continuously evolving techniques and imaginative designs to lower-priced furs without sacrificing quality. When the sisters could not find the fabric clothes they wanted to show under the furs their ready-to-wear line was born, again to great success. In 1999 the sisters sold out to LVMH and Prada for an estimated US$850m, trumping a bid from Gucci of a rumoured US$700m. LVMH have since bought out Prada and are investing heavily in the brand, expanding the network of boutiques to 117 as of 2005.