Albany International was the first and remains the oldest, municipal airport in the United States. In 1908 the airstrip was on a former polo field on Loudonville Road, 3 miles (4.8 km) north of the city in the town of Colonie. In 1909 the airport moved to Westerlo Island, in the city of Albany, but at that time was in the town of Bethlehem; the airport was named at this time. The airport was named after Teddy Roosevelt's son, Quentin, a fighter pilot during World War I who perished while in air combat. A $10,000 prize was established for sustained flight between Albany and New York City; Glenn Curtiss achieved this on May 29, 1910. Other early pioneers of aviation that stopped at this early field were Charles Lindbergh, Amelia Earhart, and James Doolittle.

Mayor John Boyd Thacher II once said "a city without the foresight to build an airport for the new traffic may soon be left behind in the race for competition". He, therefore, decided to build in 1928 a new modern airport on the Shaker site near Albany-Shaker Road in Colonie, not far from the original polo fields used as the first site of the municipal airport. The Shakers not only sold the land used but also loaned the use of tractors and tools.

The early Albany Airport was often closed and threatened with a closure that prompted repeated improvements in the late 1930s and 1940s. The airport was closed from January 1939 until December 1940, when it reopened to traffic during daylight hours only, and then with no restrictions since January 1942. The airport has not been closed (other than for weather and emergency landings) since.

The February 1947 C&GS chart shows three 3,500-foot (1,100-meter) runways aimed at 12, 98, and 133 degrees magnetic. By 1950, the primary runway was up to 5,000 feet (1,500 meters) in length and was hard-surfaced. In 1966 and 1967, the north–south runway was extended to 6,000 feet (1,800 m). In the 1980s, the main runway was extended again to the north to 7,200 feet (2,200 m). The east/west crosswind runway was also extended eastward to 7,200 feet (2,200 m) from 5,999 feet (1,828 m) in the early 2000s, but the landing threshold was maintained, thus the available landing distance was unchanged because of obstructions to the east, but the full length was available for takeoffs to the west. A few years later, another 1,300 feet (400 m) of the runway was added to the north end of the main runway to bring it to its 8,500 foot (2,600 m) length. The north–south runway gained runway centerline lighting and the north-facing runway added touchdown zone lighting to lower landing minimums – including a category two instrument landing system approach.

ALB was jointly owned and managed by the city and county of Albany until 1960 when Mayor Erastus Corning 2nd ended the city's stake.

In 1962 a new terminal building opened. A landside building had ticket counters, a coffee shop, and baggage claim on the first floor and a restaurant, offices and viewing area on the second floor. A single-story boarding concourse extended outwards from this building. In 1968 this concourse was widened to allow more concessions and boarding space. The terminal was expanded again in 1979, with the addition of a new two-story building attached diagonally to the northwest. It had boarding gates for Allegheny Airlines on the second floor and baggage carousels on the first floor.

The Albany County Airport Authority was created by the county in 1993 with a 40-year lease to operate the airport in 1996. Construction of a new terminal began on May 16, 1996; it opened in June 1998. It was designed by Reynolds, Smith & Hills and Stracher-Roth-Gilmore, and it was built around the existing terminal, most of which was demolished upon its completion. Only the 1979 extension remains from the old terminal building.

In 1999 the Airport Authority began building a 16,000-square-foot (1,500 m2) addition to the new terminal for Southwest Airlines' use. The project was completed in 2000 and included the addition of two new dual jet bridges allowing passengers to board and deplane from front and rear doors of the aircraft.

Construction started in 2019 for various airport improvements. This includes a new 1,000 car parking garage, which will open in March 2020; new solar panels, escalators, energy efficient taxiway lighting, concessions are also being installed. In addition, some passenger jet bridges are being replaced.

Frontier Airlines permanently left ALB in late 2022 due to their own budget cuts, leaving several areas with no tenants, however in 2025, Breeze Airways is replacing Frontier.