Neighbours was created in the early-to-mid-1980s by Australian TV executive Reg Watson. Watson decided to create a soap opera after working on Crossroads and seeing how successful it and Coronation Street were in Britain. He had already created such successful Australian made soap operas as The Young Doctors, Prisoner and Sons and Daughters. Watson proposed the idea of making a show that would focus on more realistic stories and portray teens and adults who talk openly to each other and solve their problems together. Watson, who worked for the Grundy production company, decided to make his show appeal to both Australia and Britain. In 2005, Darren Devlyn and Caroline Frost from the Herald Sun reported that Watson then took his idea to the Nine Network in 1982, but it was rejected. Former Network Nine chief executive Ian Johnson commented that it was one of the "biggest missed opportunities" in his twenty-four years at the network. He added "I remember it being discussed, but I'm not exactly sure what went against it. It may have had something to do with the fact we'd picked up Sale of the Century with Tony Barber in 1980 and it was doing huge business, so we didn't have a pressing need for a five-night-a-week show." Watson then took his idea to the Seven Network, who commissioned the show, following the success of his other Seven Network soap opera, Sons and Daughters. Several titles for the show were discussed, including People Like Us, One Way Street, No Through Road and Living Together until the network programmers voted on Neighbours. The first episode was broadcast on 18 March 1985 and reviews for the show were favourable. However, the Melbourne-produced programme underperformed in the Sydney market and after a meeting of the general managers, Seven decided to drop the show in October 1985. Seven's Melbourne programme boss, Gary Fenton said Sydney chief Ted Thomas told the other general managers that Seven could not afford three dramas and argued that the Sydney-based A Country Practice and Sons and Daughters be retained.
Neighbours was immediately bought by Seven's rival Network Ten. The new network had to build replica sets when it took over production after Seven destroyed the original sets to prevent the rival network obtaining them. Ten began screening the series with episode 171 on 20 January 1986. In 1986, the series was bought by the BBC as part of their new daytime schedule in the United Kingdom. Neighbours made its debut on BBC1 on 27 October 1986 starting with the pilot episode. It soon gained a loyal audience and the show became particularly popular with younger viewers, and before long was watched by up to 16 million viewers - more than the entire population of Australia at the time. In 1988 Neighbours became the only television show to have its entire cast flown over to the UK to make an appearance at the Royal Variety Performance in front of the Queen. Neighbours has since become the longest running drama series in Australian television and the seventh longest running serial drama still on the air in the world. In 2005, Neighbours celebrated its 20th anniversary and over twenty former cast members returned for a special episode, which saw them sitting down to watch a documentary about Ramsay Street. At the Logie Award ceremony that year, the show was inducted into the Logie Hall of Fame.
2007 saw the show undergo a revamp, which included a switch to recording in HDTV, the introduction of a new family, the departure of several existing characters and a new version of the show's familiar theme song and opening titles. In addition, episode titles were abandoned, having been in use for the previous three years. Daniel Bennett, the new head of drama at Network Ten, announced that the crux of the Ramsay Street story would go "back to basics" and follow a less sensational path than of late with the emphasis on family relations and suburban reality. Executive producer Ric Pellizzeri said new writers, actors and sets would bring the soap back to its glory days. He added "We moved too far into event-driven stories rather than the character-driven stories that made Neighbours what it is". The relaunch failed to attract more viewers in Australia. Pellizzeri left the series at the end of 2007 and former Neighbours scriptwriter, Susan Bower, became the new executive producer. In 2008, Neighbours was branded "too white" by black and Asian viewers in Britain and in Australia there was talk of a "White Australia policy" when it came to casting actors for soaps. In response to the criticism, Bower made a decision to add more ethnically diverse extras, small walk on roles and speaking parts, as well as introducing the character of Sunny Lee (played by Hany Lee) an exchange student from South Korea.
On 18 March 2010, Neighbours celebrated its 25th anniversary. In April, Channel 5 in the UK launched a search to find a female actress to play the part of Poppy Rogers. The search was similar to the Dolly magazine competition in Australia. August saw Neighbours air its 6000th episode. Digital Spy revealed that the week-long 6000th episode celebrations would see the wedding of regular characters, Donna Freedman (Margot Robbie) and Ringo Brown (Sam Clark). It was later announced that an attempt on the life of long term regular, Paul Robinson (Stefan Dennis) would be the focus of the actual 6000th episode. Bower said "Last week I saw episode 6,000. This marks Australian television history. The 6,000th episode falls on a Friday so the whole week is a special one. As Stefan Dennis - Paul Robinson - was in the first episode 25 years ago, it was decided that his character play a most important role in this very special event".
In late 2010, TV Tonight reported that Neighbours would reduce crew operations in 2011 so production could be upgraded. The changes meant that the location manager and catering team were no longer required, studio shoots would be reduced from three cameras to two, and location shots will be mainly confined to the Ramsay Street and Lassiter's complex sets, with occasional filming in one-off places. Of the changes, FremantleMedia said " Neighbours is undergoing a work flow upgrade to accommodate advances in technology and production techniques to ensure we are at the forefront of professionalism and efficiency." They added that the show's production model had been in place since 1985 and that it was time to evolve it. On 14 March 2011, The Australian reported that Neighbours has become the first television show available to watch on a free iPhone application. Viewers are able to watch whole episodes within three hours of them airing on Eleven. Nick Spooner, the head of Ten digital media said "This is part of what we call our 'three-screen approach' - broadcast, online and mobile - and it is intended to build viewer engagement with a show and our brand. This is a way for us to stay in touch with our audience and to keep them coming back." To celebrate the wedding of Prince William of Wales and Kate Middleton, Neighbours filmed a specially commissioned scene for the UK episode airing on the same day as the wedding. The episode, which had already aired in Australia, marked the first time an Australian show recorded extra scenes for a UK broadcaster.
On 25 October 2011, it was announced Bower would be leaving Neighbours in December 2011 to move into a new international role with FremantleMedia. Of her departure, Bower told Colin Vickery of the Herald Sun, "I love Neighbours, it is a wonderful show and because of this I felt it was important that fresh eyes and brains take over to keep this Australian icon contemporary. Having said that, I'm really excited about the new role and thank FremantleMedia for this wonderful opportunity." Former City Homicide producer, Richard Jasek, took over Bower's role, while Alan Hardy took over the role of producer. On 4 December 2013, it was confirmed that Jasek would be leaving Neighbours and Jason Herbison had been promoted to series producer. FremantleMedia's head of drama Jo Porter became executive producer, while Laurence Wilson became the associate producer. The show celebrated its 7000th episode on 24 October 2014. In March 2015, Neighbours celebrated its 30th anniversary and twelve former cast members returned for the anniversary episodes that revolved around an Erinsborough Festival. Network Ten and Channel 5 aired a documentary special titled Neighbours 30th: The Stars Reunite, which featured interviews with current and former cast members, including Kylie Minogue, Jason Donovan and Guy Pearce, reflecting on their time on the show. Natalie Lynch succeeded Wilson as producer in early 2016.