Formed in 1950 by Jac Holzman and Paul Rickholt, the label concentrated on folk music recordings during the 1950s and early 1960s, but in the mid 1960s branched out into pop, gaining considerable prestige on the music scene by being one of the first labels to sign up leading acts from the new wave of American psychedelic rock of 1966-67. The label's two most important signings were the Los Angeles bands Love and the Doors. Also in 1967, Elektra launched its influential Nonesuch Explorer Series, one of the first collections of what is now referred to as world music.

Elektra was acquired by Kinney National Company in 1970, along with the Nonesuch Records subsidiary. Soon afterwards, Kinney consolidated their label holdings under the Warner Communications umbrella.

Holzman remained in charge of Elektra until 1972, when it merged with Asylum Records to become Elektra/Asylum Records, with Asylum's founder, David Geffen, now in charge. Holzman went on to start Discovery Records. In 1975 Geffen stepped down due to health problems.

As the 1990s drew to a close, Elektra began to noticably underperform on the charts, despite of having a large staple of noted acts. It developed a bit of a reputation for not properly promoting its releases and was easily lagging behind its sister labels Warner Records and Atlantic Records.

In 2004, following Time Warner's sale of Warner Music Group to a group of private investors, Elektra, Atlantic Records and Lava Records were merged into the new Atlantic Records Group with Elektra as a subsidiary.

The current prospects for Elektra are unclear, with most of its artists now released through Atlantic.