The band was formed in December 1996 (see 1996 in music), originally consisting of Matt Skiba (guitar/lead vocals), Rob Doran (bass/vocals), and Glenn Porter (drums/vocals), all hailing from McHenry County, Illinois, in Chicago's Northwest suburbs. 1997 saw the release of the band's first EP, Sundials. This was followed shortly after by the departure of Rob Doran, after which Dan Andriano, former singer of Asian Man Records band Tuesday and bassist for Slapstick, took his place and they began recording. The band released their second EP, entitled For Your Lungs Only, in 1998, which began to build them a sizable fanbase in the American Midwest. Later on that year, the band released their first full length album, Goddamnit, followed by Maybe I'll Catch Fire in 2000 (both on Asian Man Records). Also in 2000, the band released a collection of their previously released EPs on their self-titled album.

Soon after, Alkaline Trio was signed by Vagrant Records, a record label much larger than their previous label, Asian Man Records. Joined by new drummer Mike Felumlee (previously of the Smoking Popes, now of Squirtgun), From Here to Infirmary was released in 2001 on Vagrant Records. Recorded at Pachyderm Recording Studio, this was their first album to see any interest from alternative radio and the mainstream media, with the semi-hit punk single "Stupid Kid" and the inclusion of the song "Armageddon" on the Tony Hawk's Underground video game. Their cover of "Over at the Frankenstein Place" was included in the compilation The Rocky Horror Punk Rock Show, an album made to pay tribute to The Rocky Horror Picture Show.

After the release, Mike Felumlee left the band to be replaced by drummer Derek Grant, previously of The Suicide Machines, Telegraph, Thoughts of Ionesco, Remainder, The Fansys, The Fuckin' Idiuts, Broken Spoke and Gyga.

Their next full-length album was Good Mourning, released in 2003, with the album's launch single "We've Had Enough" seeing much the same success as the previous single "Stupid Kid." The album was something of a departure from earlier works, featuring greater production values and a move toward the mainstream.

The band appeared on various compilation albums, notably Plea for Peace Vol. 1, Vagrant Records: Another Year on the Streets Vol. 1, 2, and 3, and Rock Against Bush Vol. 1. Matt Skiba and Dan Andriano have both independently recorded split records, Skiba with Kevin Seconds on Asian Man Records and Andriano with Mike Felumlee on Double Zero Records, as well as jointly performing backing vocal duties on the album This is Unity Music by Common Rider. They recorded 2 split EPs: one with Hot Water Music in 2000 and the other with One Man Army in 2004.

After the release of Good Mourning in 2003, it was noticed that a second guitar player was hidden beside the speakers or off-stage during live performances of some songs. Alkaline Trio stated that this guitarist, Nolan McGuire, who is also the band's tour manager and an ex-member of fellow Chicago punk band The Honor System, was not a member of the band, but with Matt's developing use of lead/second guitars on record, a second guitar was needed on tour in order to reproduce the sound. As of the release of Crimson, McGuire usually appears on stage with the band. He can also be seen handing Matt's guitar to him near the beginning of the Time To Waste video.

In 2004, Dan became a member of The Falcon, a supergroup of sorts consisting of The Lawrence Arms' bassist Brendan Kelly, previously of Slapstick (alongside Dan) and The Broadways, and drummer Neil Hennessy. The Falcon also saw contributions from Todd Mohney of The Killing Tree and formerly Rise Against. The band released an EP, God Don't Make No Trash / Up Your Ass With Broken Glass in 2005 and its first full length, Unicornography in September 2006.

In February 2008, Asian Man Records released a 10th Anniversary reissue of the band's 1998 full length, Goddamnit. The disc was remixed and remastered, with 4 bonus tracks from their 1996 demo tape added, and the album was repackaged with new artwork and a feature length DVD documentary about the band's early days. Predictably, the release caused quite a bit of excitement for long-time followers of the group.

On Saturday, February 9, 2008, the band posted a message on their MySpace page explaining that they had been in the studio for three weeks working on the new album without revealing a release date or title. The band later announced via their fan club, the Blood Pact, that their upcoming album, titled Agony and Irony, would be released on July 1st, 2008. As a gift for members, they made a new song titled "In Vein" available as an exclusive. On April 4, they posted the song on their MySpace for 24 hours.

An episode of the MTV show The Hills featuring the band aired on May 5, 2008.

A contest ("Settle The Score"), was announced May 6, 2008, encouraged fans to download sheet music of "Love Love Kiss Kiss" from the official website and send Alkaline Trio footage of their interpretation of the song before it is released by the band. Entries are currently being judged by the band and prizes for the winner include a feature on the band website, tour tickets, VIP passes and an opportunity to play the song with the band in a jam session. Footage of the jam session will be featured on the website.

As expected, the band released Agony & Irony on July 1, 2008. First week sales for the album placed Alkaline Trio at number 13 on the Billboard album charts, making it the highest the band has ever charted to date.