Lilium was founded in 2015 by four engineers and PhD students at the Technical University of Munich, Daniel Wiegand, Sebastian Born, Matthias Meiner and Patrick Nathen, and named after the aviation pioneer Otto Lilienthal.

[3][4] The Lilium Eagle, an unmanned two-seat proof of concept model, performed its maiden flight at the airfield Mindelheim-Mattsies near Munich in Germany on 20 April 2017.

[10] At the beginning of 2019, Lilium held discussions with Switzerland's national rail company SBB on the use of the air taxi as a means of transport between the station and the home and a letter of intent was signed.

[21] Luca Benassi, a former Airbus executive with experience at Boeing and NASA, has been named Lilium's chief development engineer.

[24] In March 2020, Lilium raised $240 million in funding led by Tencent, with participation of previous backers such as Atomico, Freigeist and LGT.

[29] In early June 2022 it was announced that Klaus Roewe would become CEO of Lilium on August 1, replacing Daniel Wiegand.

[30] In late March 2021, Lilium announced a partnership with American aerospace supplier Honeywell during the SPAC IPO process.

[38] In April 2023, the company informed Handelsblatt that there was a funding gap of 300 million euros until the first flight in the second half of 2024, and that the subsequent test phase for certification would last until 2026.

[43] On 24 October 2024, after failing to settle an agreement with the Bavarian Government to secure a €50 million loan, the Lilium Board of Directors approved application for self-administration of its German subsidiaries.

[45] On 24 December 2024, it was announced that a consortium of investors, Mobile Uplift Corporation GmbH, would buy parts of the insolvent company.

[47] In January 2025, Mobile Uplift expected the takeover to be completed in the first quarter of the year and announced that it would invest more than 200 million euros to finance Lilium until it entered the market.

[50][51] In February 2021, Forbes published an article citing several former employees who claimed that Lilium's aircraft development faced challenges  during the flight test.