The aiport was opened in 1960 under the name Punta Raisi Airport (Aeroporto di Punta Raisi) due to its location on the cape of the same name. The new complex was built to replace the old Boccadifalco airport, which proved incapable of accommodating modern jet aircraft due to a short runway and mountainous surroundings that made flights unsafe.

It was given the name Falcone Borsellino in memory of the two leading anti-mafia judges Giovanni Falcone and Paolo Borsellino who were murdered by the Sicilian Mafia in 1992. A 1.90-metre-diameter (6.2 ft) plaque featuring their portraits can be found to the right of one of the main outside entrances to the departure hall, set into a mosaic of Sicily. Created by the Sicilian sculptor Tommaso Geraci, it bears the inscription Giovanni Falcone–Paolo Borsellino–Gli Altri–L'orgoglio della Nuova Sicilia (Giovanni Falcone–Paolo Borsellino–The Others–The Pride of the New Sicily).

In 1994, GESAP was charged with the partial management of the airport through a convention that granted the company a 20-year mandate to run land-side activities (the airport buildings and surrounding areas). In April 1999, GESAP obtained an anticipated mandate to manage the airport's air-side activities, and, more specifically, the flight infrastructure (runways, links, taxiways and aprons).

In June 2005, Eurofly launched seasonal flights from Palermo to New York City using Airbus A330s. The company merged with Meridiana in 2010 to create Meridiana Fly, which continued the service. As a result of Meridiana Fly's decision to rebrand as Air Italy, the route ended in October 2017. Neos commenced a summer-seasonal route in June 2024 with Boeing 787 Dreamliners, reconnecting Palermo to New York–JFK. In May 2025 United Airlines also commenced a new summer-seasonal service between the two cities, connecting the Sicilian city to Newark, near New York, using Boeing 767-400s.