Propellerhead Software was founded in 1994 by Ernst Nathorst-Böös, Pelle Jubel and Marcus Zetterquist and launched with ReCycle.

They became popular in 1996 after releasing the ReBirth RB-338, described by MusicRadar in February 2011 as "one of the most important virtual instruments in the history of electronic music".

By the late 1990s, advancements in technology meant that it became feasible for home users to build their own virtual studios from software, and so in 1999, Propellerhead ended development on ReBirth to work on Reason.

MusicRadar described it in 2011 as "broadly similar to the likes of Logic and Cubase, but" with its "user interface mimick[ing] a rack full of equipment, allowing instruments, effects and mixers to be linked together in order to create a complete production setup".

[16] Pcmag.com noted that "existing fans [...] should take a close look", though criticised its user interface, saying that it had "aged considerably" compared to its competition.