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Grolier's 1985 Academic American Encyclopedia on CD-ROM was text-only.

The premium editions contain over 62,000 articles and other multimedia content, such as 25,000 pictures and illustrations, over 300 videos and animations, and an interactive atlas with 1.8 million locations.

Its articles are integrated with multimedia content and may have a collection of links to websites selected by its editors.

Microsoft initiated Encarta by purchasing non-exclusive rights to the Funk & Wagnalls Encyclopedia, incorporating it into its first edition in 1993.

(Funk & Wagnalls continued to publish revised editions for several years independently of Encarta, but then ceased printing in the late 1990s.) Previously having been referred to by the codename "Gandalf," Microsoft had originally approached Encyclopædia Britannica, the gold standard of encyclopedias for over a century, in the 1980s, but it declined, believing its print media sales would be hurt; however the Benton Foundation was forced to sell Encyclopædia Britannica, Inc.

In July 2006, Websters Multimedia, a Bellevue, Washington subsidiary of London-based Websters International Publishers, took over maintenance of Encarta from Microsoft.

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