The San Carlos Flying Field was established during World War I by J. Paulding Edwards on a field north of Cordilleras Creek and east of today's Old County Road. A 300-foot-long (91 m) hangar was situated along the western end of Terminal Way. San Carlos' first pilot's license was issued on July 10, 1917 to Lieutenant Prince.

In 1923, the airfield was taken over by the Cooley family. Charles P. Cooley was the primary flight instructor and his father, Frank S. Cooley, operated the field. On July 12, 1940, a fire destroyed the main hangar and twelve aircraft. Operations were maintained on an airstrip bounded by today's Brittan Avenue, Washington Street, Old County Road, and Industrial Road.

Sometime around 1935 the Cooley family established a different airfield near the foot of today's Twin Dolphin Drive in San Carlos. That facility had a 2,100-by-200-foot (640 by 61 m) runway and a building that housed various industrial activities. The Cooley family eventually determined that the airport needed to be moved because its proximity to the Phelps and Steinberger Sloughs limited the length of the runway.

The Cooleys opened another airfield at the present location of the San Carlos airport in 1948. In 1952, ownership was transferred to Francis Michaud, who renamed it San Carlos-Belmont Airport. Repair and administrative buildings were added, and plans were developed to lengthen the runway to 7,000 feet (2,100 m). In 1957, the field was renamed San Mateo County Airport, Inc. Ownership was split between Michaud, the Piombo Construction Company, and six other parties. San Mateo County purchased the property in 1964. Today the airport is completely funded with user and business fees and receives no money from the County's General Fund.

In 1999, a proposal was given to extend the runway by 400 feet (120 m) into the marshy area near Bair Island south of the airport. The proposal encountered opposition among the adjacent residents in Redwood Shores and Foster City, who complained about the potential for increased noise. Opponents felt a longer runway would lead to bigger and noisier planes, in particular, more corporate aircraft of the light jet category. As a result, the runway was not extended.

In 2017, residents complained of excessive noise at the airport caused by flights operated by Surf Air (now operated by Southern Airways Express). They formed a group named Calm The Skies. San Mateo County acknowledged the noise issue caused by Surf Air. Part of the County solution was to introduce an arrival procedure called "Bayside Visual Approach" that underwent testing in 2016 which shifts flights and noise from San Mateo County to the city of Sunnyvale in neighboring Santa Clara County. A curfew has also been discussed in addition to other measures to mitigate the noise.

On January 30, 2025, the County of San Mateo Airports announced that the San Carlos Airport in would enter an ATC Zero state on February 1, 2025, meaning the airport’s Federal Contract Tower would be unstaffed. The Federal Aviation Administration had awarded a new contract for air traffic services at San Carlos Airport to Robinson Aviation, but the contract did not include locality pay adjustments for the high cost of living in the San Francisco Bay Area. As a result, all current air traffic controllers declined employment offers, leading to a loss of air traffic control services. The ATC Zero state was narrowly averted after negotiations led to an acceptable employment contract.