BFDI, created by Cary and Michael Huang, originated from Cary's fifth-grade drawing of Firey. This led to a comic concept where objects could eliminate each other based on their properties, introducing early characters like Woody, Teardrop, Spongy, and Match. Subsequent generations of characters, including Pencil, Eraser, Bubble, Coiny, Tennis Ball, Flower, Ice Cube, Blocky, Snowball, Rocky, Golf Ball, Needle, Pen, Leafy, and Pin, were progressively introduced, with some specifically designed for the first season.

In the summer of 2009, inspired by a comic called 'Total Firey Island,' Cary and Michael developed the idea for BFDI. After months of intensive work including writing, voice acting, audio editing, and animating, the first episode of BFDI was released on January 1, 2010. Despite the release of competitor 'Inanimate Insanity' during BFDI Season 1, Cary and Michael persevered, releasing 25 fully animated episodes over two years. Initially, a second season was not planned due to financial constraints.

The YouTube monetization program shifted, allowing BFDI a second chance with Season 2, Battle for Dream Island Again (BFDIA), which began on June 29, 2012. This season introduced TV as a temporary host and saw the first elimination of a newbie character, Donut. Despite entering high school, Cary and Michael continued releasing episodes, celebrating BFDI's third birthday with its longest episode to date, BFDIA 5A, and introducing new characters in BFDIA 5B.

From late 2013 to early 2016, BFDI entered a hiatus primarily due to Cary and Michael's high school commitments and demotivation. A major blow occurred in March 2014 when their AdSense account was shut down, preventing them from earning revenue. After multiple failed appeals, Michael released a video in March 2016 explaining their struggles. A Google employee eventually saw the video and reinstated their account, leading to the announcement of BFDI's return in the summer of 2016.

IDFB (Island Dream for Battle) 1 was released on September 1, 2016, featuring high-quality animation but faced delays due to the Hong twins' college commitments. The planned release of IDFB 2 was repeatedly postponed and eventually never materialized, leading Cary and Michael to consider a new direction for the show.

In 2017, Cary and Michael decided to skip IDFB and move to a fourth season (Battle for BFB) with a lower-stakes approach. They expanded their team, bringing in Satomi for writing, voice acting, animating, and editing, and recruited Stanford friends for voice acting. BFB launched on November 3, 2017, introducing Four and X as new hosts and catalyzing the growth of a larger object show community. However, fan expectations for increasingly polished episodes led to longer production times and immense pressure on the small team.

After BFB 12, updates became scarce, and BFB 13 was released a year later, followed by the first BFDI Meetup. BFB 14 also experienced significant delays but was well-received. After BFB 14, Cary moved to Japan for study abroad, leaving Satomi and Pokey as main directors for BFB 15. Upon Cary's return, he and Michael decided to split the series into 'Post-Split BFB' (more light-hearted and fast-paced) and 'TPOT' (The Power of Two, focusing on character development and high-quality animation). The split, implemented with BFB 16 on March 25, 2020, was met with initial fan outrage. To manage the increased workload, they hired around 40 people for writing, audio editing, design, backgrounds, and animation for Post-Split BFB, which despite its “sloppy” nature, was seen as a fun experience.

Jacknjellify completed another BFDI season after nine years, with Flower winning. Currently, TPOT and BFDI episodes are released approximately every two months. BFDI 6 was released on September 1, 2023, ten years late, highlighting the enduring commitment to the series. With improving TPOT episodes, the future of BFDI appears bright, and the memorable moments created by Cary and Michael are expected to be cherished for many years, even if the series eventually concludes.