[2] Founded by Syed Mohammed Ali on 14 January 1991, as Bangladesh transitioned and restored parliamentary democracy,[3][4] the newspaper became popular for its outspoken coverage of politics, corruption, and foreign policy.

In the late 1980s, plans for a major English newspaper in Bangladesh were drawn up by Syed Mohammad Ali and Mahfuz Anam in Bangkok.

[9] The newspaper was set up in 1991, which coincided with Bangladesh's return to parliamentary democracy after 15 years of military rule and presidential government.

It became the country's largest circulating English-language newspaper and quickly overtook The Bangladesh Observer and Weekly Holiday.

[10] In a widely read commentary titled "This is no way to strengthen democracy", Anam also blasted the military-backed caretaker government for the arrest of Sheikh Hasina in 2007.

[11] In 2009, an investigative report by The Daily Star implicated former Prime Minister Khaleda Zia's son Tarique Rahman and close aides from Hawa Bhaban in the 2004 Dhaka grenade attack.

In 2023, Anam was appointed chairman of the holding company of The Daily Star after the death of longstanding chairperson Rokeya Afzal Rahman.

Mizanur Rahman, the Head of Operations, and Tajdin Hasan, the Chief Business Officer, are the two other key leaders of the newspaper.

He was co-accused with Matiur Rahman, editor of the Bengali newspaper Prothom Alo, in defamation cases filed by Salahuddin Quader Chowdhury.

In 2016, speaking at a panel discussion on ATN News, Mahfuz Anam admitted that The Daily Star ran stories fed to the newspaper by military intelligence outfit DGFI during the military-backed state of emergency and caretaker government in 2007 and 2008.

The newspaper's website was briefly blocked on 1 June 2018 after it reported the extrajudicial killing of Ekramul Haque by members of the Rapid Action Battalion.

In February 2024, Executive Editor Syed Ashfaqul Haque and his wife Tania Khondoker were sent to jail after they surrendered to a court in Dhaka, following the death of a fifteen year old female maid at their house in Mohammadpur Thana.

The deceased maid was a teenage girl named Preeti Urang who worked as a servant in the house of the executive editor.