Founded in 1980 as the first CD-only music label ('ryko' is a Japanese word meaning 'sound from a flash of light'), Rykodisc achieved some notable successes in the reissues market and remained fiercely independent.

Over the years the label acquired Hannibal Records, Tradition Records, Gramavision Records and Restless Records. The label's catalogue now exceeds 1,200 titles.

In 1999, Chris Blackwell left Island Records and bought Rykodisc as a means of acquiring music marketing and distribution expertise for his new venture, a media company called Palm Pictures. In 2001, Blackwell parted ways with Rykodisc.

In 2006, the Ryko Corporation was acquired by Warner Music Group.