The distillery was built in 1794 by the brothers John and Hugh Stevenson and operated by them until 1866, when it was bought by Peter Curnstie. It was then acquired by Walter Higgin in 1883 and rebuilt. In 1898, Alexander Edward, who also owned Aultmore Distillery, bought out Higgin. In its first year of operation, it suffered major losses when a major blending company, Pattison's of Leith, went under. In 1923, Oban was sold to Dewars and joined Distillers Company with that company in 1925. It fell silent from 1931 until 1937 and again from 1969 to 1972 when a new still house was built. In 1989 a new visitors' centre was installed.
The Oban Distillery is primarily known for its 14-year-old malt, which is marketed as part of Diageo's "Classic Malts Selection" range, launched in 1988. Also available is a "Distiller's Edition" bottling, which is finished in a Montilla Fino sherry cask before bottling. There is also an 18-year-old limited edition and a rare 32-year-old edition. In December of 2014 Oban introduced a NAS (non-age-statement) bottling, called Oban "Little Bay".