The online café phenomenon was started in July 1991 by Wayne Gregori in San Francisco when he began SFnet Coffeehouse Network. Gregori designed, built and installed 25 coin operated computer terminals in coffeehouses throughout the San Francisco Bay Area. The café terminals dialed into a 32 line Bulletin Board System that offered an array of electronic services including FIDOnet mail and, in 1992, Internet mail.

The concept of a café with full Internet access (and the name Cybercafé) was invented in early 1994 by Ivan Pope. Commissioned to develop an Internet event for an arts weekend at the Institute of Contemporary Arts (ICA) in London, and inspired by the SFnet terminal based cafes, Pope wrote a proposal outlining the concept of a café with Internet access from the tables. The event was run over the weekend of 12–13 March 1994 during the 'Towards the Aesthetics of the Future' event.

In June 1994, The Binary Cafe, Canada's first Internet café, opened in Toronto, Ontario.

After an initial appearance at the conference site of the 5th International Symposium on Electronic Art, ISEA, in August 1994, an establishment called CompuCafe was established in Helsinki, Finland, featuring both Internet access and a robotic beer seller.

Inspired partly by the ICA event, a commercial establishment of this type, called Cyberia, opened on September 1, 1994 in London, England.

The first public, commercial American Internet café was conceived and opened by Jeff Anderson in August 1994, at Infomart in Dallas, Texas and was called The High Tech Cafe.

Next, in the USA, three Internet cafés opened in the East Village neighborhood of New York City: Internet Cafetm, opened by Arthur Perley, the @ Cafe, and the Heroic Sandwich.

A variation of Internet café called PC bang (similar to LAN gaming center) became extremely popular in South Korea when StarCraft was released in 1997. Although computer and broadband penetration per capita were very high, young people went to PC bangs to play multiplayer games.