4AD was founded as Axis Records in late 1979, then a subsidiary of Beggars Banquet, by two of its employees, producer Ivo Watts-Russell and Peter Kent. Axis released a few singles early in 1980 when they found out that its name was already being used by another music company, which forced them to rebrand the label as 4AD.
Within a year, Watts-Russell and Kent bought the label from Beggars Banquet and 4AD quickly became one of the UK's most important indie labels of the 1980s. Peter Kent left 4AD in 1981 to start his own Situation Two Records and Ivo Watts-Russell became the sole owner and served as 4AD's president until the late 1990s.
In the early 1980s, 4AD developed a very strong, easily recognizable brand, both for its music and visual identity. Watts-Russell hired graphic designer Vaughan Oliver and photographer Nigel Grierson whose cover art was just as important for turning the label into a cult brand as the dark, etheral sounds of key bands like the Cocteau Twins or Dead Can Dance.
Probably the defining song for 4AD's style was Song To The Siren, a Tim Buckley cover recorded in 1984 by This Mortal Coil, sort of a "4AD super group", formed by initiative of Ivo Watts-Russell. In the mid-1980s, 4AD expanded its roster to add influential American bands as The Pixies, Throwing Muses, and later, The Breeders.
In 1999, Watts-Russell sold his share in 4AD back to Beggars Banquet, and the label is still part of the Beggars Group today, along with other major UK indie brands as Rough Trade and Matador.