In 1991, in Helsinki, Linus Torvalds began a project that later became the Linux kernel. It was initially a terminal emulator, which Torvalds used to access the large UNIX servers of the university. He wrote the program specifically for the hardware he was using and independent of an operating system because he wanted to use the functions of his new PC with an 80386 processor. Development was done on Minix using the GNU C compiler, which is still the main choice for compiling Linux today (although the code can be built with other compilers, such as the Intel C Compiler).

Linus Torvalds had wanted to call his invention Freax, a portmanteau of "freak", "free", and "x"(as an allusion to Unix). During the start of his work on the system, he stored the files under the name "Freax" for about half of a year. Torvalds had already considered the name "Linux," but initially dismissed it as too egotistical

In order to facilitate development, the files were uploaded to the FTP server (ftp.funet.fi) of the Helsinki University of Technology (HUT) in September 1991. Ari Lemmke, Torvald's coworker at the HUT who was responsible for the servers at the time, did not think that "Freax" was a good name. So, he named the project "Linux" on the server without consulting Torvalds. Later, however, Torvalds consented to "Linux": "After many arguments, he finally admitted that Linux was simply the better name. In the source code of version 0.01 of Linux, the name 'Freax' was still used in the makefile. Only later was the name Linux used. Thus the name actually not planned at all became generally accepted world-wide.