Chris Baty started the project in July 1999 with 21 participants in the San Francisco Bay area. In 2000, it was moved to November "to more fully take advantage of the miserable weather." and launched an official website, designed by a friend of Baty's. That year 140 participants signed up for the event, including several from other countries. Baty launched a Yahoo! group to facilitate socialization between participants and, after the posters began asking about guidelines, he set most of the event's basic ground rules: the novel must be new, cannot be co-authored, and must be submitted in time to be verified. Of the 140 participants, 21 completed the challenge as manually verified by Baty himself.

The following year, Baty expected similar numbers but 5,000 participants registered, which he credits to news of the event being spread by bloggers and later being reported on by various news organizations including the Los Angeles Times and Washington Post.Though Baty was happy with the large turn out and popularity of the event, in the background it nearly did not happen as the website had no automatic registration system. Baty and a group of his friends, who volunteered to help, had to manually process all of the registrations, working for several days in shifts and leaving some with temporary wrist injuries. Within the first day of the event hackers attacked the site, resulting in participants trying to update their word counts seeing a pornographic image and the message "You Suck". Though the site was quickly fixed, their small hosting company requested the event find a new company as it was consuming too much bandwidth and system resources for their company. Already consuming five times its allotted bandwidth, Baty didn't want to change the host mid-event, so he scaled back the usage and canceled the word count verification normally done via email. Instead, participants were asked to post themselves as winners on an honor system; in the end, 700 people would do so. There were also problems with two people creating unauthorized merchandise using the event's new official logo and slogan, "No Plot, No Problem." They complied with Baty's request to stop selling, after he promised that official items would be forthcoming.

During the event, Baty was approached by AlphaSmart with an offer to donate a laptop to participants, and give National Novel Writing Month itself $10 for every unit sold through the website. The vanity press, iUniverse, offered to publish all winners' manucripts for free, though it rescinded the offer after Baty explained how many potential winners there would be. He was leery of having companies providing "kickbacks" and initially declined AlphaSmart's offer as well. Still, the greatly increased cost to host the event's website and the time it took him from his freelance work left Baty scrambling to pay for it. He'd already put $5,000 of his own funds into the event, and the work load was becoming too much for him to handle alone. He estimated that he'd need another $10,000 to pay for hosting, domain registrations, and other business expenses, to get a lawyer on retainer, and to hire a web designer and a programmer to redesign and update the web site's code, respectively. After his applications for grants were rejected, he turned to the participants, hoping the sales of the new official shirts, along with donations, would help. He sent a request that people donate whatever they felt was fair. Expecting everyone would send $1 or so, he was greatly disappointed in the response, with only $3,500 raised. Initially put off, he decided that he needed to just work harder on expressing its needs before the start of the event.
"This was the start of my education in running an event without a mandatory entry fee. The biggest lesson of which is this: When you make contributions voluntary, very few people volunteer to contribute. No matter how great a time they had or how much they believe in your cause, 90% of participants just won't find their way to clicking on the PayPal link or mailing in a couple dollars. The karmic repercussions of it all were mind-boggling to me. Who were these monsters? I'd spent the last month staying up till 3 am every night patiently answering emails, offering encouragement, and giving up every ounce of love and support that the Red Bull hadn't leached from my body. And when I asked for one dollar in return, they turned a cold shoulder? Was this the definition of community?...Either I was a monster, or none of us were monsters. I did some quick calculations and decided, for the sake of my self-image, that none of us were monsters. We were just busy. With our hearts in the right places and way too much going on in our lives for us to always remember to support the institutions that made us happy."
—Chris Baty, in sharing the history of National Novel Writing Month and his disappointment over the lack of donations in the third year.
2002 saw massive technical improvements and increased automation to the site, as well as what Baty described as "laugh-so-we-don't-cry t-shirt misadventures." Media attention from National Public Radio and CBS Evening News drew increased attention and a participant count of 14,000. The next year, the NaNoWriMo team began the Municipal Liaison program and sent out the first set of pep talk emails. Baty also began work on "No Plot? No Problem!" during the 2003 NaNoWriMo, writing the NaNoWriMo guide concurrent with his own fiction novel.

The site continues to grow every year; 2004 was marked by a new site layout, entirely new code, book-styled Flash profile pages, and 42,000 participants. In 2005, 59,703 people participated and 9,765 were declared winners. New features to the site included the Young Writer's Program and the official Podcast. 2006 included more participants, more publicity from the likes of BoingBoing.net and Yahoo, and additional features such as a WriMo comic and a sponsorship program.

In 2007, registered participants reached 101,767. This year also brought the first fundraising event—"A Night Of Writing Dangerously". All participants, or "WriMos", who donated $200 or more to the cause received an invitation to a 6-hour event in San Francisco featuring free food and fun, prizes, and much more. Weekly email pep talks from well-known authors were also new for 2007. There were 15,335 reported winners. Participants wrote 1,187,931,929 words that year, according to the project's website.

In 2008, over 119,000 people signed up, with 21,720 reported winners—up by 33% compared to 2007; over 1,643,343,993 words were written.

In 2009, over 170,000 people signed up and 2,427,190,537 words were written.

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