John Janick initially conceived of the label while attending high school, but it was not until he enrolled at the University of Florida in Gainesville and teamed up with Less Than Jake drummer-lyricist Vinnie Fiorello that Fueled By Ramen became a reality. The name of the label was inspired by only being able to afford a diet of inexpensive ramen at the time, due to having invested most of their money into making records.
Ramen's first major success came in 1998 with the self-titled EP from Jimmy Eat World, which enabled the label to buy its first office space in Tampa.
Ramen early on partnered with the independent distribution arm of Warner, ADA; Warner's Lyor Cohen finally making a deal for Ramen that led Janick to say "We operate like an indie label that’s very small and nimble and can do their own thing, but we have the resources of a major company."
In 2004, Fall Out Boy's Pete Wentz introduced Fueled By Ramen to fellow Chicago pop rock outfit The Academy Is..., who released their debut album Almost Here, the following year. Soon thereafter, Janick joined forces with Wentz to create Decaydance Records and released a series of albums from a disparate-sounding group of acts ranging from the alternative hip hop of Gym Class Heroes to the indie-pop combo The Hush Sound. In September 2005, Decaydance and Fueled By Ramen released A Fever You Can't Sweat Out, the RIAA double platinum-certified debut album from Las Vegas' Panic! at the Disco.
In 2006, Vinnie Fiorello left the label, citing disagreements in the direction of future signees and loss of passion in the music the label was investing itself in.
In 2007, the label opened an office in midtown Manhattan and that same year Paramore's album Riot! debuted in the top 20 of the U.S. Billboard 200, was certified gold and a year later gained platinum status. Panic! at the Disco's second studio album Pretty. Odd. achieved similar success, debuting at number 2 on the Billboard 200 chart, selling over 139,000 copies in its first week, and gaining platinum success. Later in 2016, Panic! at the Disco's fifth studio album Death of a Bachelor debuted at number 1, selling 196,000 copies in its first week, making it the fastest-selling album in the label's history.
In 2012, Fueled By Ramen signed musical duo Twenty One Pilots. They released their label debut album Vessel in 2013 which included songs, "Ode To Sleep", "Holding On to You", "House of Gold", and "Car Radio". In 2015, they released their album Blurryface, which included singles, "Tear in My Heart", "Fairly Local", "Stressed Out", "Heavydirtysoul" and "Ride". The album peaked at Number 1 on the Billboard top 200 chart, and was certified triple platinum after selling over 1.5 million copies in the U.S. "Stressed Out" is the most viewed music video on Fueled By Ramen's YouTube channel, reaching over 1 billion views.
In June 2018, Warner Music Group announced that Fueled By Ramen, among other labels, would be included in a new label, Elektra Music Group. It officially launched on October 1, 2018.