The company was founded in 1962 by Alex Moulton (1920–2012) who had designed the "Hydrolastic" and rubber cone suspension systems for the BMC Mini motorcar.

[1] Moulton bicycles are noted for unconventional frame design, small wheels, and front and rear suspension.

He also thought large wheels made a bicycle slow and cumbersome to store, and did not easily fit emerging societal commuting patterns in the developed world, which often combined more than one form of transport.

[4] Moulton considered that small wheels with high-pressure tyres would result in less rolling resistance, less inertia and hence greater acceleration.

The F-frame had no top tube, as such, and could therefore be easily mounted by those with mobility limitations, whether imposed by physical infirmity or by type of clothing.

The architecture and design critic Peter Reyner Banham, known for often controversial views on technology and industrialisation, was a keen advocate and user of the original Moulton.

Eleanor Bron's 1978 book Life and Other Punctures celebrates travels around France on an original Moulton.

A further low volume, high specification 'S' range of Moulton bicycles was produced separately at another small workshop in Bradford-on-Avon and consisted of the Deluxe MS2, Safari MS3, Stowaway MS5 and the top-of-the-range 'S' Speed.

The drop in sales from the increased competition brought the company into financial difficulties and in August 1967, it was taken over by Raleigh.

A newer model, stylistically and structurally similar to the original Moulton design, was manufactured by Bridgestone.