Prior to Interplay, the company's founding developers—Brian Fargo, Troy Worrell, Jay Patel, and Rebecca Heineman—worked for Boone Corporation, a video game developer based in California.

[6][5] Published in 1984, Mindshadow is loosely based on Robert Ludlum's Bourne Identity while The Tracer Sanction puts the player in the role of an interplanetary secret agent.

[5] The same year, Interplay Productions, then contracted out by Electronic Arts, ported EA's Racing Destruction Set to the Atari 8-bit computers.

The conversion, entirely coded by Rebecca Heineman, was released in 1986 via Electronic Arts for the United States and Ariolasoft for the European market.

Interplay's parser was developed by Fargo and an associate and in one version understands about 250 nouns and 200 verbs as well as prepositions and indirect objects.

Interplay made a name for itself as a quality developer of role-playing video games with the three-part series The Bard's Tale (1985–1988), critically acclaimed Wasteland (1988) and Dragon Wars (1989).

Another game, Star Trek: Secret of Vulcan Fury, was in development in the late 1990s but was never completed and much of its staff laid off due to budgetary cuts prompted by various factors.

Other PC games released during the mid- to late 1990s included Carmageddon, Fragile Allegiance, Hardwar and Redneck Rampage.

The spin-off series started with Baldur's Gate: Dark Alliance; the game's success forged a sequel as well.

Prior to this, Titus resecured full distribution rights to its titles in North America, which were not counted for as part of the Vivendi Universal deal.

[16] On September 27, Interplay announced that Baldur's Gate: Dark Alliance and Giants: Citizen Kabuto would become the first titles under the new agreement.

[17] On November 29, 2001, BioWare announced that they had ended their partnership with Interplay, citing unpaid royalties and Titus sublicensing distribution to third-parties for the reason.

Titus' co-founder Hervé Caen took over as Interplay's new CEO and began a range of several unpopular but arguably necessary decisions to cancel various projects, in order to save the company.

On September 29, 2003, the company was entered into a lawsuit with Vivendi Universal over alleged breaches of their partnership and a failure of payment.

In April 2007, in order to pay off creditors, the company altered its licensing agreement with Bethesda Softworks and sold the Fallout IP to them.

[36] In 2021, Interplay, via Black Isle Studios, re-released Baldur's Gate: Dark Alliance on modern consoles, and later that year also released a port of it on PC for the first time.