n 1994, Tom Fulp launched a Neo Geo fanzine by the name "New Ground" (from the Greek roots neo- and geo- translated into English) sending sporadic issues to around 100 members of a club on Prodigy. In 1995, he launched a website for his project called "New Ground Remix". The website increased in popularity in the summer of 1996 after Fulp created the games "Club a Seal"[3] and "Assassin". In 1997, Fulp created the games "Club a Seal II" and "Assassin II," and decided that he wanted a new place to host these games. He created a separate website, New Ground Atomix, for this purpose. In early 1998, Fulp began experimenting with Macromedia Flash. A Flash front page was introduced to New Ground Atomix and the flash game "Telebubby Fun Land" was released. Later that year, he combined his two websites into a new website with the name "Newgrounds". Fulp had to change hosts to accommodate increasing traffic, and started selling T-shirts to pay for the website's hosting bills. By 1999, traffic to Newgrounds was considerable and Fulp had to change hosts every few months. After introducing banner ads to pay for growing hosting bills, Fulp partnered with Troma, who hosted the site in exchange for a share of ad revenue. Fulp eventually added a chat room and message board to the website, which allowed people visiting the website to interact with each other. Many users had begun submitting their own Flash creations to Fulp, which he showcased in a portion of the site called "The Portal." A friend of Fulp's by the name of Ross built the Grounds Gold system, which allowed users to gain points for visiting the site. Ad revenue had increased, so Fulp hired Ross and together they started development of the automated Portal, which would allow users to submit their own games to the website.

After the dot-com bubble collapsed, Newgrounds struggled to pay its hosting costs. After their affiliation with Troma ended in 2003, Newgrounds switched to a different bandwidth provider, which significantly reduced hosting costs. 2004 saw some fiscal recovery from the online market crash, and the Numa Numa Dance viral phenomenon made its debut on Newgrounds near the end of the year, and became one of the first viral videos on the internet. Medals, the equivalent of in-game achievements, were introduced for the first time through the API in 2009, soon followed by a "Sharing" component that would allow user-generated content to be distributed within games, such as custom level designs. The Art Portal in its complete form was launched in June 2009. In 2012, Newgrounds published their first mobile game, titled GroundCats, on iOS. In 2011, the Newgrounds Annual Tournament of Animation (NATA) began as a 4–6 month long animation competition on Newgrounds sponsored by both Adobe and Tom Fulp. In 2012, major changes to the website included the launch of the video player, allowing users to publish movies that were not in .SWF format for the first time, and support for HTML5-coded games, whi