The label was formed in the flurry of new punk rock-inspired labels forming in the early 1980s. The intention was to record the original local music of Christchurch, but soon the label rose to national prominence by championing the emerging music of Dunedin.
The Pin Group' "Ambivalence" 7" was the first release from Flying Nun, although it is widely assumed that "Tally Ho" by The Clean was the first release, as it unexpectedly reached number nineteen in the New Zealand charts, bringing the label unexpected profile and income. This was followed by the seminal Dunedin Double EP, a release which cemented the place of the southern city in the forefront of New Zealand independent music.
Many of the most prominent kiwi rock and alternative bands have been signed to Flying Nun at some stage in their careers. In 2000 Australian youth radio network Triple J produced a list of the thirty "Greatest New Zealand acts of all time", twenty of which were Flying Nun artists.
The label has been home to various styles of music including the much-debated Dunedin Sound, "high-end pop with a twist", lo-fi experimentation, strongly Velvet Underground influenced pop, minimalism, industrial, and rock-electronic crossover.
In 1990 Festival Records bought a fifty percent stake in Flying Nun, and then in 2000 merged with Mushroom Records bringing Flying Nun into the Festival Mushroom Records family of companies.
In 1999 Matthew Bannister of The Sneaky Feelings wrote Positively George Street: A Personal History of the Sneaky Feelings and the Dunedin Sound covering the New Zealand music industry of the 1980s, including Flying Nun.
Flying Nun was bought 100% as part of the purchase of FMR (Festival Mushroom Records) by Warner Music Group in 2006.
2009; Rumour, gossip and journalistic hearsay that Roger Shepherd maybe purchasing the label back off Warner Music, possibly as an online only label.