Two brothers, Édouard and André Michelin, ran a rubber factory in Clermont-Ferrand, France. One day, a cyclist whose pneumatic tyre needed repair turned up at the factory. The tyre was glued to the rim, and it took over three hours to remove and repair the tyre, which then needed to be left overnight to dry. The next day, Édouard Michelin took the repaired bicycle into the factory yard to test. After only a few hundred metres, the tyre failed. Despite the setback, Édouard was enthusiastic about the pneumatic tyre, and he and his brother worked on creating their own version, one which did not need to be glued to the rim.

Michelin was incorporated on 28 May 1888. In 1891, it took out its first patent for a removable pneumatic tyre which was used by Charles Terront to win the world's first long distance cycle race, the 1891 Paris–Brest–Paris.

Michelin has made a number of innovations to tyres, including in 1946 the radial tyre (then known as the "X" tyre). It was developed with the front-wheel-drive Citroën Traction Avant and Citroën 2CV in mind. Michelin had bought the then bankrupt Citroën in the 1930s. As of August 2008, this tyre is still available for the 2CV.

In the 1920s and 1930s, Michelin operated large rubber plantations in Vietnam. The Vietnamese workers were exploited pitilessly and brutally, which led to the famous labor movement Phu Rieng Do.

In 1988, Michelin acquired the tyre and rubber manufacturing divisions of the American B.F. Goodrich Company founded in 1870. Two years later, it bought Uniroyal, Inc., founded in 1892 as the United States Rubber Company. Uniroyal Australia had already been bought by Bridgestone in 1980.

Michelin also controls 90% of Taurus Tire in Hungary, as well as Kormoran, a Polish brand.

As of 1 September 2008, Michelin is again the world's largest tyre manufacturer after spending two years as number two behind Bridgestone. Michelin produces tyres in France, Germany, USA, United Kingdom, Canada, Brazil, Thailand, Japan, Italy and several other countries. On 15 January 2010, Michelin announced closing of its Ota, Japan plant, which employes 380 workers and makes the Michelin X-Ice tyre. Production of the X-Ice will be moved to Europe, Asia, and North America.