KT&G's history in Korea dates back to 1899, when the Imperial Household formed a monopoly bureau to control sources of tax revenues. In December 1948, a bereau was established by the Korean government to monopolize all tobacco and ginseng products.

In 1988, KT&G was perfomed to a government-run public corporation. In 2002, following the abolishment of the tobacco monopoly law, KT&G was transformed into a public corporation in an effort to liberalize tobacco importing, selling and manufacturing.

Since market liberalization, KT&G has been competing with domestic and foreign tobacco manufacturers, and today KT&G holds more than 60% of the total domestic market. This in turn provides a strong basis for other businesses.

KT&G is also obtaining remrkable results in the overseas market. Since first exportiing ESSE to Middle Eastern countries in 1996, both the volume and number of brands, along with number of target markets have steadily grown. KT&G mainly exports its products to the Middle East and CIS countries, including Russia, and is currently widening its markets in Southeast Asia, America and Eastern Europe.

Direct investment for building manufacturing facilities has alaso been made in countries such as Turkey, Russia (to be established in 2010) and Iran. Main brand ESSE is becoming popular in Middle East and East European markets, while other brands including PINE and Zest are also gaining popularity.