In 1942, Naval Air Station Atlantic City was built on 2,444 acres (9.89 km2) of leased private land in Egg Harbor Township, New Jersey. Its purpose was to train various carrier air groups consisting of fighter, bomber and torpedo squadrons.

In August 1943, NAS Atlantic City changed its mission to strictly fighter training, consisting of low and high altitude gunnery tactics, field carrier landing practice (FCLP), carrier qualifications (CQ), bombing, formation tactics, fighter direction, night operations and an associated ground school curriculum.

In 1957, the Navy announced its intention to shut down the $12 million base in July 1960, but even sooner than that, NAS Atlantic City was decommissioned in June 1958 and transferred to the Airways Modernization Board (AMB), later taken over by the FAA. In November 1958 the then-Federal Aviation Agency, now Federal Aviation Administration (FAA), took over operations of the AMB. The lease transferred to the FAA and was sold for $55,000. Atlantic City decided to retain 84 of the 4,312 acres. The FAA expanded the former U.S. Navy land parcel to about 5,000 acres (20 km2) and established the National Aviation Facilities Experimental Center research facility that eventually became the William J. Hughes Technical Center. The South Jersey Transportation Authority (SJTA) initially leased portions of the airport from the FAA and now serves as the airport owner and operator of the facility.

When the Navy departed in 1958, the 119th Fighter Squadron of the New Jersey Air National Guard relocated to Atlantic City from their former base at Newark International Airport with their F-84F Thunderstreak aircraft, establishing an Air National Guard base on the site of the former naval air station. The current 177th Fighter Wing of the New Jersey Air National Guard has been at this location ever since.

During the 1960s and early 1970s, the active duty U.S. Air Force's 95th Fighter Interceptor Squadron, stationed at Dover AFB, Delaware, maintained an Operating Location and Alert Detachment of F-106 Delta Darts at Atlantic City ANGB on 24-hour alert. After the 177th Fighter Wing reequipped with the F-106 in 1973, the 177th took on the air defence alert mission.

In the fall of 1983, American International Airways attempted to operate a small hub at the airport with Douglas DC-9-30 jetliners with passenger service to Boston, Buffalo, Chicago, Cleveland, Detroit, Fort Lauderdale, Miami, Orlando, Pittsburgh, Tampa and West Palm Beach. ACY has also had US Airways jet service to Pittsburgh as well as US Airways Express turboprops to Philadelphia, Baltimore and Washington, and Continental Express turboprops and regional jets to Cleveland Hopkins International Airport. This regional jet service for Continental Airlines was operated by ExpressJet Airlines with Embraer ERJs.

People Express Airlines (PeopleExpress) provided Boeing 737 service from / to EWR (Newark Airport), in the 1980's.

Delta Air Lines also had flights to Boston on Delta Connection regional jets operated by Atlantic Coast Airlines. In addition, Delta Connection via its partner Comair operated flights to Cincinnati and Orlando, which ended on May 1, 2007. WestJet had Boeing 737 jetliner flights from ACY to Toronto, but ended them on May 9, 2010, leaving the airport with no international service. On April 1, 2014, United Airlines started service from Atlantic City to Chicago–O'Hare and Houston, but the service was discontinued on December 3, 2014. Air Canada had seasonal flights to Toronto in the Summer of 2015, but has decided not to return in the Summer of 2016, once again leaving the airport without international scheduled flights.

Work began in August 2011 upgrading the passenger screening facilities at airport. The checkpoint expansion saw three new screening lanes be added, as well as improvements to the airport's infrastructure. The expansion also includes development of a Federal Inspection Services station. Under this project, additional passenger loading bridges and gates were added, technological upgrades & baggage claim improvements were made, additional retail space was added, and improved check-in capabilities were made.

In 2013, a new airport rescue and firefighting station opened at Atlantic City International Airport. The new, 4,500-square-foot (420 m2) building includes emergency vehicle bays, administrative & staff living areas, and enhanced equipment & apparatus facilities – in addition to space for training requirements.

In 2022, American Airlines started scheduled service from the airport to their airplanes at Philadelphia International Airport using buses in lieu of planes; the service is ticketed & operated as an airline flight but utilizes buses. This airside-to-airside service, which is solely for screened passengers who booked a seat on the route, is operated by American's bus service partner, Landline, on the airline's behalf.

In May 2023, Atlantic City International Airport was to receive service from a new carrier, Sun Country Airlines. Sun Country was to fly from its hub at Minneapolis - St Paul International Airport (MSP) to ACY biweekly, deploying its 737-800s on the route.