Picaboo was founded in 2002 by longtime friends, and Babson College classmates, Howard Field and Kevin McCurdy. The first version of its photo editor was lanched in 2005. The name Picaboo was derived from the phrase "peekaboo," a common expression that brings smiles to people’s faces. Originally available as a downloadable desktop application, Picaboo has since retired its desktop application for an exclusively browser-based flash application.

In December 2012, The Wall Street Journal rated Picaboo the top photo book creator in terms of finished product quality. In June of 2014 Picaboo claims to have printed its 2 millionth photo book.