[1] First authorized on 5 October 2018 by the BUILD Act, the independent agency was formed on 20 December 2019 by merging the Overseas Private Investment Corporation (OPIC) with the Development Credit Authority (DCA) of the United States Agency for International Development (USAID), as well as with several other smaller offices and funds.

[8][10] Relevant legislation — the Better Utilization of Investments Leading to Development (BUILD) Act — was introduced in Congress to establish the DFC shortly thereafter.

[10][11] The BUILD Act was introduced in the House and Senate in February 2018 with broad bipartisan support,[12] based on proposals drafted by researchers at the Center for Global Development.

[13] Concern over Chinese investment abroad and the inability for existing U.S. developmental finance institutions to keep up was a major factor pushing the passage of the Act, and the establishment of the DFC has widely been viewed as means to counter China, particularly its Belt and Road Initiative.

[9][12][14][15][16] The Act aimed to ameliorate deficiencies in existing U.S. development finance policy, particularly restrictions on OPIC's actions.

The DFC lists innovation, sustainable jobs, workers' protection, women's economic empowerment, and bolstering global supply chains as broader themes in its investment priorities.

[18] The DFC states that its investments aim to advance global development, U.S. foreign policy, and U.S. taxpayer interests.

[22] Trump administration, through DFC, announced that it planned to give Kodak a $765 million loan for manufacturing ingredients used in pharmaceuticals, in order to rebuild the national stockpile depleted by the COVID-19 pandemic and reduce dependency on foreign factories.