Most historians trace the origin of organized crime in the United States back to the 1880's, when many members of the Mafia in Sicily emigrated to this country and formed gangs. The United States Mafia groups first attracted national attention in 1890, when David C. Hennessey, chief of police in New Orleans, was murdered while trying to curb Mafia activities in the city.

From 1900 to the end of World War I, the Mafia was prominently associated with extortion rings, collectively called the Black Hand by the newspapers, that operated in Italian immigrant communities. Black Hand extortion involved demands, backed by threats, of “protection money” from owners of businesses.

The present-day syndicate was created during the Prohibition era, 1920–33. The bootlegging of alcoholic beverages opened up a lucrative new area of crime for mobsters, and during the early and middle 1920's, many gang wars were fought over the control of bootlegging. Criminals who rose to power through bootlegging included Charles “Lucky” Luciano, Dutch Schultz, Meyer Lansky, and Frank Costello in New York; Frank Milano in Cleveland; Hyman Abrams in Boston; and Johnny Torrio and Al Capone in Chicago.

By the end of the 1920's, most of the gangs had been consolidated into large Italian-dominated “families.” The present structure of organized crime was created by Luciano in 1931, when under his leadership a “commission” of the country's most powerful crime bosses was formed. By this time five “families” had emerged in New York, and they tended to have the strongest influence on the commission.

With the end of Prohibition, organized crime during the 1930's became heavily involved in gambling, illicit drugs, racketeering, and prostitution. Lansky and Costello prospered with illegal gambling in the eastern states, and Luciano made a fortune from houses of prostitution. Chicago mobsters gained control of the film projectionists' union and through repeated threats of labor stoppages extorted millions of dollars from Hollywood film companies.

During the 1940's, the syndicate took over the numbers and policy lotteries in the black communities. Under the leadership of Lansky and Benjamin “Bugsy” Siegel, the syndicate also established itself in Las Vegas and built a number of multimillion-dollar casinos.

The national scope of syndicate crime was first publicized in 1950–51 during televised hearings held by a Senate committee headed by Estes Kefauver. A police raid in 1957 on a mobster estate in Apalachin, New York, which broke up a meeting of some 75 leaders of the syndicate from across the nation, provided dramatic evidence of the existence of a nationally organized syndicate. Leading syndicate bosses in the 1950's included Tony Accardo in Chicago and Vito Genovese and Albert Anastasia in New York.

In, 1963 a Senate investigating committee headed by John L. McClellan heard testimony from Joseph Valachi, who had decided to reveal mob secrets after having been given a life sentence for murder. Valachi's testimony provided much information on the history and internal workings of the syndicate. Bosses who came to prominence in the 1960's included Salvatore Giancana in Chicago and Joseph Colombo and Carlo Gambino in New York.

During the late 1960's, street gangs and motorcycle gangs, which had long existed, developed into sophisticated organizations, growing wealthy on the illicit drug trade.

In 1970, Congress passed the Organized Crime Control Act to strengthen law enforcement efforts against organized crime. The act authorized a security program to protect federal witnesses from mob revenge and, under what are known as the RICO (Racketeer Influenced Corrupt Organization) provisions, gives special powers to prosecutors. These powers allow prosecutors to confiscate assets of a person convicted under a RICO provision and to bring charges against a mob boss for criminal acts committed by a subordinate. Many syndicate figures were successfully prosecuted with the help of the witness protection program and RICO provisions, but organized crime syndicates continued to flourish.

For many years, the syndicate recruited many of its members from among the existing members' sons. This began to change in the 1970's, however, as the children began to attend college and pursue careers in legitimate fields. As a result, the syndicate has resorted to recruiting new members from Sicily and from non-Italian groups.