The FAI meetings were initially attended by members of the Portuguese anarchist organizations União Anarquista Portuguesa and Confederação Geral do Trabalho, including the Zaragoza Congress of the CNT in 1936.

It was founded in Valencia in 1927 (after a preliminary meeting the previous year in Marseille, France), to campaign for keeping the CNT on an anarchist path by challenging the bureaucracy of the CNT—which it viewed as having grown to become a mediating link between labor and capital, rather than a representative of the working class.

This issue was becoming especially tense, as Miguel Primo de Rivera's dictatorial regime took over in Spain, and engineered a crackdown on labour movements.

The most moderate trade-unionists, under Ángel Pestaña, were ultimately expelled, forming the Syndicalist Party in April 1934, and leaving the CNT leadership under firm FAI control by the time of the Spanish Civil War.

Members of the FAI were at the forefront of the fight against Francisco Franco's forces during the Civil War, mainly in the Eastern Army (Ejército del Este).