Originally, Issy-les-Moulineaux was simply called Issy. The name Issy comes from Medieval Latin Issiacum or Isciacum, perhaps meaning "estate of Isicius (or Iccius)", a Gallo-Roman landowner, although some think the name comes from a Celtic radical meaning "under the wood".

In 1893 Issy officially became Issy-les-Moulineaux. Les Moulineaux was the name of a hamlet on the territory of the commune, apparently named Les Moulineaux due to the windmills (French: moulins) that stood there.

The town was once the location of the Château d'Issy, destroyed in 1871, former home of the Princes of Conti. On 1 January 1860, the city of Paris was enlarged by annexing neighboring communes. On that occasion, about a third of the commune of Issy-les-Moulineaux was annexed to Paris, and forms now the neighborhood of Javel, in the 15th arrondissement of Paris.

Issy-les-Moulineaux is home to a community of 5,000 Armenians that have established themselves in the area since the 1930s. The community has two Armenian churches, an athletic club, a school, a monument dedicated to the Armenian Genocide, and a street named after Armenia called Rue d'Armenie, and Rue d'Erevan named after Armenia's capital Yerevan. Issy-les-Moulineaux became twin cities with Echmiadzin, Armenia in December 1989.

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