Although a process for condensing milk was patented in England in 1835, the first successful and practical method was patented in the United States by Gail Borden (1801-1874) in 1856. This was a major achievement, since condensed milk was the only source of pure, wholesome milk in the days before refrigeration. Borden evaporated about 60 percent of the water from whole milk in a vacuum and sold his purified product unsealed, just as regular milk was packaged during that time. Later in 1856, he began producing a canned condensed milk sweetened with sugar, which acted as a preservative.

While condensed milk was initially rejected by a public accustomed to watered-down "swill" milk, Borden's product was used extensively during the Civil War. To keep up with military demand, Borden licensed other manufacturers to make the milk, but many sold an inferior product. Borden adopted the American Bald Eagle as a symbol for the high quality of his sweetened condensed milk. The Eagle Brand name is still in use today.

Unsweetened condensed milk was first canned by J. B. Meyenberg, who patented a pressure-cooker method for sterilizing condensed milk in Switzerland in 1884. After emigrating to the United States in 1885, Meyenberg set up and promoted a number of condensed milk factories, including the Helvetia Milk Condensing Company in Illinois.

Condensed milk was used for purposes such as infant feeding in the early 1900s. After World War I, however, many people had refrigeration, which brought with it the ability to store fresh milk. In the 1940s, consumers began using sweetened condensed milk in desserts, due to a shortage of sugar. This remains a major use for the product today.