During the development of .NET Framework, the class libraries were originally written in a language/compiler called Simple Managed C (SMC).In January 1999, Anders Hejlsberg formed a team to build a new language at the time called Cool, which stood for "C like Object Oriented Language".Microsoft had considered keeping the name "Cool" as the final name of the language, but chose not to do so for trademark reasons. By the time the .NET project was publicly announced at the July 2000 Professional Developers Conference, the language had been renamed C#, and the class libraries and ASP.NET runtime had been ported to C#.

C#'s principal designer and lead architect at Microsoft is Anders Hejlsberg, who was previously involved with the design of Turbo Pascal, CodeGear Delphi (formerly Borland Delphi), and Visual J++. In interviews and technical papers he has stated that flaws in most major programming languages (e.g. C++, Java, Delphi, and Smalltalk) drove the fundamentals of the Common Language Runtime (CLR), which, in turn, drove the design of the C# programming language itself.