It was developed in 1979 by the Swedish designer Gillis Lundgren, and IKEA have sold over 140 million units of the bookcases worldwide.

When designing the product, emphasis was given to functionality and flexibility recognising that different homes had different requirements and space availability.

[1] Initially the bookcases were 90cm wide, but this was revised to 80cm in 1988 following complaints from customers that the shelves bent under the weight of the books and the item didn't fit on IKEA transport pallets.

[5] In 1992, a German newspaper and television station conducted tests on 18 Billy bookshelves and found that the formaldehyde vapour levels released by 8 of them was higher than permitted by regulation.

The source of the vapour was traced to the lacquer used by the company on the bookshelf, and IKEA was forced to stop all production and sale of the bookshelves until the problem could be rectified.

[11] In 2020, IKEA began reworking the bookcase, switching from wood veneer to paper foil and replacing metal nails with plastic fasteners.