The Beastie Boys came together in 1979 as a punk band called The Young Aboriginies. In 1981 Adam Yauch (MCA) joined the group, and from the suggestion of their guitarist John Berry, they changed the band's name to Beastie Boys.

The name "Beastie" is sometimes thought to have originally stood for "Boys Entering Anarchistic States Towards Internal Excellence," and that the initials B.B. intended to mimic Washington DC hardcore punk band Bad Brains, however these were actually afterthoughts once the band's name was already Beastie Boys, according to Mike D and MCA.

The band's original line-up consisted of Adam Yauch on bass, Kate Schellenbach on drums, John Berry on guitar, and Michael Diamond (Mike D) on vocals. Their first gig was at Berry's house on Yauch's 17th birthday. The band quickly earned support slots for Bad Brains, the Dead Kennedys, the Misfits and Reagan Youth at venues such as CBGB and Max's Kansas City, playing at the latter venue on its closing night. That same year, the Beastie Boys recorded the 7" EP Pollywog Stew at 171A studios, an early recorded example of New York hardcore.

John Berry left the group (later forming Thwig, Big Fat Love, and the San Francisco booze rock band Bourbon Deluxe) and was replaced by Adam Horovitz (Ad-rock)—who had previously played in the punk band, The Young and the Useless in 1983. The band also performed its first rap track, "Cooky Puss", based on a prank call by the group to Carvel Ice Cream. It became a hit in New York underground dance clubs upon its release.

It was during this period that Def Jam record producer Rick Rubin signed on and the Beastie Boys changed from a punk rock outfit to a three-man rap crew. The band released the 12" EP, Rock Hard, in 1984—the second record released by Def Jam that credited Rubin as producer.

Soon after Rubin's arrival, Schellenbach developed creative differences with the band, citing her friction with Rubin. It was believed that Rubin objected to Schellenbach's place in the band as she did not fit the hip hop image to which the band aspired. Schellenbach went on to join Luscious Jackson in 1991.

In 1985, the band opened for John Lydon's post-Sex Pistols band Public Image Ltd. , as well as supporting Madonna on her North American Virgin tour. Later in the year, the group was on the Raising Hell tour with Run DMC, Whodini, LL Cool J, and the Timex Social Club.

With their exposure on this tour, the track "Hold It Now, Hit It" made Billboard's national R&B and Dance charts. The track "She's on It" from the Krush Groove soundtrack continued in a rap/metal vein while a double A-side 12", "Paul Revere/The New Style," was released at the end of the year.

The band recorded Licensed to Ill in 1986 and released the album at the end of the year. It was a smash success, and was favorably reviewed by Rolling Stone magazine with the now-famous headline, "Three Idiots Create a Masterpiece."

Licensed to Ill became the best selling rap album of the 1980s and the first rap album to go #1 on the Billboard album chart, where it stayed for five weeks. It also reached #2 on the Urban album charts. It was Def Jam's' fastest selling debut record to date and sold over five million copies. The first single from the album, "Fight for Your Right," (sample (help·info)) reached #7 on the Billboard Hot 100, and the video (directed by Ric Menello) became an MTV staple.

The band took the Licensed to Ill tour around the world the following year. It was a tour clouded in controversy featuring female members of the crowd dancing in cages and a giant motorized inflatable penis similar to one used by The Rolling Stones in the 1970s.

The tour was troubled by lawsuits and arrests, with the band accused of provoking the crowd. This culminated in their notorious gig at the Royal Court Theatre, Liverpool, England on 30th May 1987 that erupted into a riot approximately 10 minutes after the Beasties hit the stage and the arrest of Adam Horovitz by Merseyside Police on assault charges.

After the success of Licensed to Ill, the Beasties parted ways with Def Jam and ended their relationship with Rick Rubin to sign with Capitol Records.

A bootleg album entitled "Original Ill" features original demos of all the tracks from the final version of Licensed to Ill plus deleted tracks "I'm Down" (A Beatles Song) and "The Scenario" was released in 1998.