Rolls-Royce Limited was founded in 1906 by Henry Royce and C.S. Rolls, and produced its first aircraft engine in 1914.

Around half the aircraft engines used by the Allies in World War I were made by Rolls-Royce. By the late 1920s, aero engines made up most of Rolls-Royce's business. Henry Royce's last design was the Merlin aero engine, which came out in 1935 although he had died in 1933. This was a development subsequent to the R engine, which had powered a record-breaking Supermarine S6.B seaplane to almost 400mph in the 1931 Schneider Trophy. The Merlin powered many World War II aircraft: the British Hawker Hurricane, Supermarine Spitfire, De Havilland Mosquito (twin-engined), Avro Lancaster (4-engine), Vickers Wellington (2-engine); it also transformed the American P-51 Mustang into one of the best fighters of its time, its Merlin engine built by Packard under licence. Over 160,000 Merlin engines were produced.

In the post-World War II period Rolls-Royce made significant advances in gas turbine engine design and manufacture. The Dart and Tyne turboprop engines were particularly important, enabling airlines to cut journey times within several continents, whilst jet airliners were introduced on longer services. The Dart engine was used in Argosy, Avro 748 and its military variant the Andover, Friendship, Herald and Viscount aircraft, whilst the more powerful Tyne powered the Atlantic, Transall and the Vanguard. Many of these turboprops are still in service.

Rolls-Royce engines had traditionally borne numeric designations during development and then were assigned the name of a British river on delivery. The use of river names was introduced with the earliest Rolls jet engines to reflect their nature: a steady flow of power rather than the pulses of a piston engine. RB stands for "Rolls Barnoldswick", the latter a major ex-Rover facility bought by Rolls-Royce when it traded production of engines (the Rolls-Royce Meteor) for production of the first Whittle engines.