Dolby Laboratories was founded by Ray Dolby, who started his career in high school, when he went to work part-time for Ampex Corporation in Redwood City, California. While still in college, he joined the small team of Ampex engineers dedicated to inventing the world's first practical video tape recorder, which was introduced in 1956; his focus was the electronics.

Upon graduation from Stanford University in 1957, Dolby was awarded a Marshall Fellowship to Cambridge University in England. After six years at Cambridge leading to a Ph.D. in physics, Dolby worked in India for two years as a United Nations Adviser to the Central Scientific Instruments Organization. He returned to England in 1965 to found his own company, Dolby Laboratories, Inc. in London. Always a US corporation, the company moved its headquarters to San Francisco in 1976.