Rolls-Royce Limited was founded in 1906 by Henry Royce and The Honourable 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.

Amongst the jet engines of this period was the RB163 Spey which powers the Trident, BAC 1-11, Grumman Gulfstream II and Fokker F28. Military versions of the Spey powered the Buccaneer S2 for the RAF, the Phantom F4K and F4M, and the Nimrod. The Spey was licence built by Allison Engine Company as the TF41 for the A-7 Corsair II. Other types of military engines produced in the second half of the 20th Century include the Avon and Viper; these engines powered many of the British Aircraft of this period.

Also of this period was the Conway, a low (by today's standards) bypass ratio turbofan which was used on some Boeing 707s and Douglas DC-8s, and all Vickers VC10s as well as on the MkII variant of the Handley Page Victor bomber for the RAF.

During the late 1950s and '60s there was a significant rationalisation of the British aero-engine manufacturers, culminating in the merger of Rolls-Royce and Bristol Siddeley in 1966. Bristol Siddeley, which had itself resulted from the merger of Armstrong Siddeley and Bristol in 1959, and with its principal factory at Filton, near Bristol, had a strong base in military engines, including the Olympus, which was chosen for Concorde.