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In 1987, Trent Reznor played keyboards with a Cleveland band called the Exotic Birds, then managed by John Malm, Jr.  Reznor and Malm became friends, and when Reznor left the Exotic Birds to work on music of his own, Malm informally became his manager. At the time, Reznor was employed as an assistant engineer and janitor at Right Track Studios; he asked studio owner Bart Koster for permission to record some demos of his own material for free during unused studio time. Koster agreed, commenting that it cost him "just a little wear on [his] tape heads". While assembling the earliest Nine Inch Nails recordings, Reznor was unable to find a band that could articulate the material as he desired. Instead, inspired by Prince, Reznor played all the instruments except drums himself.  This role remains Reznor's on most of the band's studio recordings, though he has occasionally involved other musicians and assistants. In 1988, after playing its first shows supporting Skinny Puppy, Reznor's ambitions for Nine Inch Nails were to release one 12-inch single on a small European label. Several labels responded favorably to the demo material and Reznor signed with TVT Records. Nine selections from the Right Track demos recorded live in November 1988, collectively known as Purest Feeling, were later released in revised form on the band's first full-length studio release, Pretty Hate Machine (1989). The overall sound on Purest Feeling is lighter than that of Pretty Hate Machine; several songs feature more live drumming and guitar work throughout, as well as a heavier use of samples from films.

Reznor coined the name "Nine Inch Nails" because it "abbreviated easily", rather than for "any literal meaning". Other rumored explanations have circulated, alleging that Reznor chose to reference Jesus' crucifixion with nine-inch spikes, or Freddy Krueger's nine-inch fingernails. The English letters NIN are also noted for their resemblance to the modern Hebrew characters of the Tetragrammaton. There is also an old English music hall song with the refrain, "I don't not know no one who don't want no nine inch nails." The Nine Inch Nails' logo, which consists of the letters [NIИ] set inside a border, was designed by Reznor and Gary Talpas. The logo first appeared on the music video for Nine Inch Nails' debut single, "Down in It", and was inspired by Tibor Kalman's typography on the Talking Heads album Remain in Light. Talpas, a native of Cleveland, would continue to design Nine Inch Nails packaging art until 1997.

Nine Inch Nails (abbreviated as NIИ) is an American industrial rock band, founded in 1988 by Trent Reznor in Cleveland, Ohio. As its main producer, singer, songwriter, and instrumentalist, Reznor is the only official member of Nine Inch Nails and remains solely responsible for its direction. Nine Inch Nails' music straddles a wide range of genres. After recording a new album, Reznor usually assembles a live band to perform with him. The touring band features a revolving lineup that often rearranges songs to fit a live setting. On stage, Nine Inch Nails often employs visual elements to accompany performances, which frequently include light shows.

Underground music audiences warmly received Nine Inch Nails in its early years. Reznor produced several highly influential records in the 1990s that achieved widespread popularity: many Nine Inch Nails songs became radio hits; two Nine Inch Nails recordings have won Grammy Awards; and their entire catalog has reached record sales exceeding over 20 million albums worldwide, with 10 million sales certified in the United States alone. In 1997, Reznor appeared in Time magazine's list of the year's most influential people, and Spin magazine described him as "the most vital artist in music." In 2004, Rolling Stone placed Nine Inch Nails at 94 on its list of the 100 greatest artists of all time. Despite this acclaim, the band has had several feuds with the corporate side of the recording industry. In 2007, these corporate entanglements resulted in Reznor announcing that Nine Inch Nails would split from its label and release future material independently.

Since 1989, Nine Inch Nails has made nine major studio releases. After a hiatus, which took place from 2009–2013, Nine Inch Nails released Hesitation Marks, through Columbia Records  Prior to this, Ghosts I–IV and The Slip were both independently released in digital form, with physical releases coming later. The digital release of the latter was made available completely free of charge, and the former, while also available for sale, can be acquired legally through means such as file-sharing due to its Creative Commons license. Nine Inch Nails has been nominated for thirteen Grammy Awards and won twice for the songs "Wish" and "Happiness in Slavery", in 1992 and 1996 respectively.