Microsoft began work on Windows Vista, known at the time by its codename Longhorn in May 2001, five months before the release of Windows XP. It was originally expected to ship sometime late in 2003 as a minor step between Windows XP and Blackcomb, which was planned to be the company's next major operating system release. Gradually, "Longhorn" assimilated many of the important new features and technologies slated for Blackcomb, resulting in the release date being pushed back several times.

The original Longhorn, based on the Windows XP source code, was scrapped, and Longhorn's development started anew, building on the Windows Server 2003 Service Pack 1 codebase, and re-incorporating only the features that would be intended for an actual operating system release. Some previously announced features such as WinFS were dropped or postponed, and a new software development methodology called the Security Development Lifecycle was incorporated in an effort to address concerns with the security of the Windows codebase.

After Longhorn was named Windows Vista in July 2005, an unprecedented beta-test program was started, involving hundreds of thousands of volunteers and companies. In September of that year, Microsoft started releasing regular Community Technology Previews (CTP) to beta testers. The first of these was distributed at the 2005 Microsoft Professional Developers Conference, and was subsequently released to beta testers and Microsoft Developer Network subscribers.

The builds that followed incorporated most of the planned features for the final product, as well as a number of changes to the user interface, based largely on feedback from beta testers. Windows Vista was deemed feature-complete with the release of the "February CTP", released on February 22, 2006, and much of the remainder of work between that build and the final release of the product focused on stability, performance, application and driver compatibility, and documentation.

Beta 2, released in late May, was the first build to be made available to the general public through Microsoft's Customer Preview Program. It was downloaded by over five million people. Two release candidates followed in September and October, both of which were made available to a large number of users.

While Microsoft had originally hoped to have the consumer versions of the operating system available worldwide in time for Christmas 2006, it was announced in March 2006 that the release date would be pushed back to January 2007, in order to give the company–and the hardware and software companies which Microsoft depends on for providing device drivers–additional time to prepare.

Through much of 2006, analysts and bloggers had speculated that Windows Vista would be delayed further, owing to anti-trust concerns raised by the European Commission and South Korea, and due to a perceived lack of progress with the beta releases. However, with the November 8, 2006 announcement of the completion of Windows Vista, Microsoft's lengthiest operating system development project came to an end.

Windows Vista is intended to be a technology-based release, to provide a base to include advanced technologies, many of which are related to how the system functions and thus not readily visible to the user. An example is the complete restructuring of the architecture of the audio, print, display, and networking subsystems; although the results of this work are visible to software developers, end-users will only see what appear to be evolutionary changes in the user interface.

Vista includes technologies such as ReadyBoost and ReadyDrive which employ fast flash memory (located on USB drives and hybrid hard disk drives) to improve system performance by caching commonly used programs and data. This manifests itself in improved battery life on notebook computers as well, since a hybrid drive can be spun down when not in use.

Another new technology called SuperFetch utilizes machine learning techniques to analyze usage patterns to allow Windows Vista to make intelligent decisions about what content should be present in system memory at any given time. It uses almost all the extra RAM as disk cache. In conjunction with SuperFetch, an automatic built-in Windows Disk Defragmenter makes sure that those applications are strategically positioned on the hard disk where they can be loaded into memory very quickly with the least amount of physical movement of the hard disk’s read-write heads.

As part of the redesign of the networking architecture, IPv6 has been fully incorporated into the operating system and a number of performance improvements have been introduced, such as TCP window scaling. Earlier versions of Windows typically needed third-party wireless networking software to work properly, but this is not the case with Vista, which includes more comprehensive wireless networking support.