The studio was founded in April 1997 as part of Ubisoft's growth into worldwide markets, with subsidies from the governments of Montreal, Quebec, and Canada to help create new multimedia jobs.

Ubisoft Montreal's break-out titles were 2002's Tom Clancy's Splinter Cell and 2003's Prince of Persia: The Sands of Time.

[5] At the same time, the city of Montreal in Quebec was looking to recover from job losses due to disappearing manufacturing and textile industries from the early 1990s.

[8][9] The studio was founded in offices in the Peck Building, a former textile factory, located in the Mile End neighbourhood along Saint-Laurent Boulevard.

[14] While these were not critically significant games, they sold well to keep the studio profitable, and allowed them to establish an internal program for creating their own IP.

[15] Prior to this, Ubisoft had closed down an internal development studio at the New York offices in 1999, which had been working on a game called The Drift, a third-person shooter with elements of stealth.

[13] The next year in 2000, Ubisoft acquired Red Storm Entertainment, which had successfully produced games based on Tom Clancy novels.

[13] The Ubisoft Montreal team started experimenting with modern spy gadgetry within the existing Drift elements, and found some potential promise to make a game in the Tom Clancy's series from it.

Prince of Persia: The Sands of Time was released in 2003, and proved a critical and financial success, with over 14 million copies sold by 2014, as well as several sequels.

The newer hardware allowed them to expand the linear gameplay from Prince of Persia: The Sands of Time into an open world.

[13][11] To continue to expand its portfolio, Ubisoft Montreal subsequently developed the Watch Dogs series, with the first game released in 2014.

Watch Dogs was developed as a modern, urban open world game, but to differentiate itself from Grand Theft Auto, incorporated elements of hacking and surveillance.

Atypical of Ubisoft Montreal's properties, For Honor is a multiplayer action combat game that uses various warriors from across various time periods.

Several other publishers, including Electronic Arts, Eidos Interactive, THQ, and Warner Bros., established studios in Montreal following Ubisoft, with the Quebec and federal governments continuing to offer subsidy programs to support high-tech job creation.