Online radio stations on the Live365 network were created and managed by music and talk enthusiasts, including both hobbyists and professional broadcasters.

The Live365 network also features radio stations from artists such as Johnny Cash, David Byrne, Pat Metheny, Jethro Tull, and Frank Zappa.

Nanocosm Inc. (the parent company of Live365) was a technology startup founded by two roommates from the Princeton class of 1981, Alex Sanford and Steve Follmer, whose initial product was NanoHome, a 3D "Virtual Home" website featuring 3D homepages on the World Wide Web.

In 1998, Andy Volk shared the idea with Nanocosm CTO Peter Rothman, and they developed the concept for a new large-scale hosted community radio service dubbed Live365.

In September 2001, Live365 began charging for use of its broadcasting services to remain financially viable in the wake of rising music royalty costs.

The Webcaster Settlement Act of 2009 expired in January 2016, ending a 10-year period in which smaller online radio stations, Live365 among them, paid lower music licensing fees compared to larger broadcasters.

Users may listen to thousands of stations on the Live365 radio network for free, with in-stream audio ads covering a portion of the music royalty and streaming costs.

The platform provides the functionality for users to either host live broadcasts or upload and create playlists of music and talk content for streaming purposes.