The Irish National Liberation Army (INLA) was formed on December 8, 1974, as the military wing of the Irish Republican Socialist Movement (a political wing, the Irish Republican Socialist Party (IRSP), was formed the same day) by Seamus Costello and other activists who had left or been forced out of the Official IRA in the wake of the OIRA's 1972 ceasefire and the increasingly electoral aproach of Official Sinn Fein. From the start, the INLA developed a reputation for feuds with other republican organisations. Shortly after it was founded the INLA became involved in violence with their former comrades in the OIRA, who wanted to destroy the new grouping. There were several assassinations on both sides, the most prominent victim being Seamus Costello, who was shot dead on Gardiner street in Dublin.

In the late 1970s and early 1980s, the INLA developed a considerable terrorist organisation in Northern Ireland, particularly based around Divis flats in Belfast, which as a result became colloquially known as, "the planet of the Irps" (a reference to the IRSP and the film The Planet of the Apes). During this period, the INLA competed with the Provisional IRA for members, both sides attacking th British Army and RUC. The INLA's most prominent action at this time was the assassination of the politician Airey Neave in London.

Members of the INLA participated in the 1980 and 1981 hunger strikes for political status. Three INLA members died during the latter hunger strike - Patsy O'Hara, Kevin Lynch, and Michael Devine.

In the 1980s the INLA all but collapsed due to splits and criminality within its own ranks, as well as the conviction of many of its members under the British supergrass scheme. In 1987, the IRSM came under attack from the Irish People's Liberation Organisation (IPLO), an organisation founded by people who had resigned or been expelled from the INLA. The IPLO's sole purpose was to destroy the IRSM. Five members of the INLA were killed by the IPLO. After the INLA killed the IPLO's leader, Gerard Steenson, a truce was reached. Although severely damaged by the IPLO's attacks, the IRSM continued to exist. The IPLO, which was heavily involved in drug dealing, was put out of existence by the Provisional IRA in the early 1990s. The INLA has also developed a reputation for crime, including drug dealing and armed robberry, which combined with its internecine violence, has meant that the organisation now has very little support or influence, even in Irish republican circles.

In 1995, four members of the INLA were arrested in Balbriggan while trying to smuggle weapons from Dublin to Belfast, including chief of staff Hugh Torney. Torney, with the support of two of his co-accused, called a ceasefire in exchange for favorable treatment by the Irish authorities. Since Torney lacked the authority to call a ceasefire, he and the two men who supported him were expelled from the INLA.

Torney and one of those men, Dessie McCleery, surrounded themselves with a gang of mercenaries and paid a North Belfast drug dealer to assassinate the new INLA chief of staff, Gino Gallagher. After the INLA executed both McCleery and Torney, the rest of Torney's gang quietly disbanded.

In December 1997, three members of the INLA imprisoned in Long Kesh assassinated LVF leader Billy Wright, also known as "King Rat."

The INLA declared a ceasefire on August 22, 1998.