The studio was founded in February 2002 by Adrian Chmielarz, previously the co-founder of Metropolis Software, together with acquaintances Michał Kosieradzki and Andrzej Poznański.

Epic Games acquired a majority share in People Can Fly in August 2007 and collaborated with the studio on projects such as Bulletstorm (2011) and Gears of War: Judgment (2013).

Before People Can Fly, Adrian Chmielarz had founded Metropolis Software with Grzegorz Miechowski, his friend since high school, in 1992.

[3] He considered leaving the video game industry due to the strain on his friendship with Miechowski but, after a few months, decided to try a new venture.

He contacted previous acquaintances Andrzej Poznański and Michał Kosieradzki, and together they founded People Can Fly in February 2002 with the aim to bring Polish game development to a much wider audience.

[3] With only about one month of operating capital left, Chmielarz contacted Epic Games and requested an evaluation copy of their Unreal Engine, intending for the studio to make a quick demo that they could pitch to other publishers for further funding.

Epic Games' vice-president, Mark Rein, having known People Can Fly's work, personally handled the agreement.

[3] During the development of Gears of War: Judgement, Epic Games began to discuss the full acquisition of People Can Fly, which they completed in August 2012.

[10] People Can Fly continued working with Epic Games on their projects Fortnite and Spyjinx alongside developing their own IP.

[12] People Can Fly opened a satellite studio in Newcastle upon Tyne in September 2017 with a number of former Ubisoft developers among the hired staff.

[16] In April 2021, People Can Fly acquired Phosphor Studios in Chicago and Game On in Montreal, raising its headcount to over 350.