Kenth Öhlin began building exhaust pipes, engines, and shock absorbers in his father's engineering workshop before switching focus entirely to suspension in the early 1980s. In 1984, the company developed its first mountain bike front suspension using telescopic forks, expanding into rear suspension thereafter. The same year brought a landmark automotive achievement as Eddie Lawson won the 500cc MotoGP title using Öhlins suspension, the first 500cc road racing world championship for the company.
In 1986, Yamaha Motor Company became co-owner of Öhlins Racing AB, though the company continued to operate independently within the Yamaha group. The company moved to its current Upplands Väsby headquarters in 1990.
The first Öhlins world championship came in the 1978 250cc Motocross World Championship with Gennady Moiseyev. The 500cc motocross title followed with Graham Noyce in 1979, and the company dominated motocross championship results through the early 1980s, winning the 125cc and Sidecar World Championships in 1982.
In 1983, Carlos Lavado became the first Öhlins road racing world champion with the 250cc Grand Prix title. Since the first 500cc road racing title in 1984, Öhlins has supported an extensive list of world champions including Wayne Rainey, John Kocinski, Kenny Roberts Jr., Valentino Rossi, Casey Stoner, Jorge Lorenzo, Marc Marquez, and many others across the 125cc, 250cc, MotoGP, Moto2, and Moto3 categories.
In World Superbike racing, Fred Merkel won the first two championships in 1988 and 1989 on Öhlins suspension. Subsequent Superbike champions supported by Öhlins include Carl Fogarty, Doug Polen, Troy Bayliss, James Toseland, Ben Spies, and Alvaro Bautista.
In automobile racing, Tommi Makinen won four consecutive World Rally Championships between 1996 and 1999 using Öhlins. Nigel Mansell won the 1993 CART IndyCar series while Andy Priaulx took the team's first World Touring Car Championship in 2007. Öhlins has also registered victories at Le Mans, the Indianapolis 500, and across multiple national championships including the British Superbike Championship and DTM.
Öhlins launched its TTX (Twin Tube X) suspension system in 2006, a development that became widely adopted across motorsport. In 1998, the company partnered with Tenneco Automotive for a Continuously Controlled Electronic System (CES), with mass production beginning in 2003 on the Volvo S60R. By 2015, Öhlins had sold five million CES valves.
In 2008, Noriyuki Haga became the first World Superbike race winner using Öhlins electronic suspension, signalling the technology's readiness at the highest level of two-wheel competition.
The company produces suspension units, steering dampers, and ride height control systems, with approximately 97% of all production exported to more than 50 countries. A two-wheel drive system for motorcycles was also developed, though later discontinued.
In November 2018, Tenneco acquired a majority stake in Öhlins. In 2007, founder Kenth Öhlin had reclaimed a 95% share of the company after the Yamaha co-ownership arrangement evolved over the years. In October 2024, Italian brake specialist Brembo agreed to acquire Öhlins for $405 million, with the transaction completed in January 2025. Öhlins continues to operate from its Upplands Väsby base with branch offices in Germany, Thailand, North Carolina, and Sweden.