Naughty Dog was founded in 1984 by the then-sixteen-year-oldAndy Gavin andJason Rubin. In their own words, they "needed money to buy video games and stuff", so they "worked hard, and that's the whole story".

The company started as JAM software The first game it sold wasSki Crazed for Apple II. Jam Software also createdDream Zone (1988), a graphic adventure that was one of the first ones to support the PC's VGA graphics standard. Both of these early games were published byBaudville.

Things really got going when Jam Software signed on withElectronic Arts and began producingKeef the Thief for the Apple IIGS, Amiga, Atari ST, and PC. Contemporaneously, the team changed its name to Naughty Dog (as the founders state, "nobody remembers exactly why we chose the name").

In 1992 Naughty Dog publishedRings of Power, one of EA's first three Genesis projects. Gavin went on to Boston's MIT to pursue a degree in Artificial Intelligence, and Rubin went to Newport Beach, California, to learn surfing and 3D computer graphics. Rubin wishes now that he had done more surfing -- within a year Naughty Dog reformed in Boston and createdWay of the Warrior for the 3DO. The project was self-financed. Searching for a publisher, Naughty Dog metUniversal Interactive Studios. UIS published the game in 1994. Naughty Dog signed a three project deal with UIS, moved to LA, and began work on a new project.

With a proper budget for further game development, the company hired new employees, starting withDave Baggett, one of Gavin’s fellow AI students from MIT, and others. They also acquired Silicon Graphics workstations.

It took two years, 16-18 hours a day, to create the firstCrash Bandicoot. Due to a “quirk” in the PlayStation developers contract, Naughty Dog managed to keep the game secret until just before E3, 1996. At that point, Sony insisted that they see the game.

The public first sawCrash Bandicoot at E3 in May of 1996, favorably comparing it toMario games.

In January 2001 Naughty Dog, Inc. was acquired bySony Computer Entertainment America. It is now part of theSCE Worldwide Studios group.

The German online magazine 4Players named Naughty Dog as Best Developer of 2009.

Their first name, JAM, stood forJason andAndy'sMagic.