Beijing's subway system was the first such system nationwide. Construction works began on July 1, 1965, as part of the military defense systems after the Sino-Soviet split. Three major cities - Beijing, Shanghai and Shenyang were proposed to build subway systems in the 1960s, but only Beijing Subway was built. It connects Xishan and the municipal area, with capability of transporting 5 to 6 divisions from Xishan to Beijing per day in case of Soviet invasion.

The first stretch of the Beijing Subway, from Beijing railway station to Pingguoyuan, was first operated on October 1, 1969. The line corresponds to the western section of Line 1 and the southern section of Line 2 (Loop Line) today. Initially, however, this line was only for official use. The system became open to general public in 1977, and in 1980 for foreign visitors.

The Loop Line was first built in 1969, on the site of Beijing city wall. On September 20, 1984 the rest of the Loop Line was opened, and the Beijing Subway was henceforth operated as two lines. On December 12, 1992, Line 1 was extended eastwards from Fuxingmen to Xidan . The second stretch (16.1 km) of the subway was funded by a $165 million (20 billion yen) loan from Japan. On September 28, 1999 Line 1 was further extended from Xidan to Sihuidong. The entire passageway was opened on June 24, 2000, thus allowing trains to go directly from Pingguoyuan to Sihuidong. There are still two stations near Xishan kept as military reserve stations and not open to public.

Line 13 was opened in two sections, the western section until Huoying on September 28, 2002, and the eastern section on January 28, 2003. In the meantime, the Batong Line, built as an extension to Line 1, was opened as a separate line on December 27, 2003. The Beijing Subway currently has 4 lines: Line 1, Line 2, Line 13 and Batong Line.

As part of the preparations for the 2008 Summer Olympics, Beijing has pledged to expand its public transportation network. Beijing projects expansion of its subway network from the current 114 km to 481.2 km by 2015 (around 200 km by 2008). Beijing plans to invest 63.8 billion yuan (7.69 billion US dollars) in future projects between 2002 and 2008. The Beijing Subway is now a market-oriented operation and is jointly funded by government and investors. The remainder will be covered by low interest bank loans, mostly provided by the Big Four banks in China.