Due to declining attendance and declining sponsorship, the ECB sought a replacement one-day competition after the Benson & Hedges Cup was discontinued in 2002. The Board sought to appeal to the multitudes of cricket fans who were turned off by the slower tempos of the game by providing fast-paced, thrilling games. In 2001, county chairmen were presented with Stuart Robertson's proposal for a 20-over per innings match, and they decided 11-7 to approve the new format.

The Twenty20 Cup's first formal Twenty20 matches amongst English counties took place on June 13, 2003. The Surrey Lions defeated the Warwickshire Bears by Nine wickets in the championship game to win the inaugural Twenty20 season in England. The inaugural Twenty20 game at Lord's between Middlesex & Surrey on July 15, 2004, drew 27,509 spectators, the biggest turnout for a county cricket game there (apart from a one-day final) since 1953.

The popularity of the Twenty20 format quickly increased with surprising audience attendance, new local competitions like Pakistan's Faysal Bank T20 Cup as well as the Stanford 20/20 event, and also the financial reward in the format. This was soon after Twenty20 matches were adopted by other cricket boards.

The regional West Indies teams took part in the Stanford 20/20 event. Allen Stanford, a convicted fraudster who ran a significant Ponzi scam, provided at least US$28,000,000 in funding for the event. The competition was planned to be held every year. Guyana took up the $1,000,000 first-place prize after defeating Trinidad & Tobago by 5 wickets. In October 2008, a Stanford Superstars team made up of West Indies domestic players and Middlesex, the winners of the English as well as Caribbean Twenty20 competitions, competed in a spin-off tournament called the Stanford Super Series. Trinidad and Tobago won the event and took home US$280,000 in prize money. The Stanford Superstars took against England on November 1 in the first of what was anticipated to be five matches in as many years, with the winner earning US$20,000,000 in each contest.

At Eden Park in Auckland, the first men's complete international Twenty20 game was played on February 17, 2005, with Australia defeating New Zealand. The match took place in a lighthearted manner, and both teams wore 1980s-style uniforms, with the New Zealand team's being a replica of the Beige Brigade's. At the Beige Brigade's request, several of the players also wore hairstyles and mustaches that were in trend in the 1980s, competing among themselves for the " best retro look". The players as well as umpires took it a bit less seriously as Australia's victory became clearer towards the end of New Zealand's innings. Glenn McGrath mockingly reenacted the Trevor Chappell underarm situation from a 1981 ODI between the two teams, and Billy Bowden responded by issuing a mock red card.

The ICC World Twenty20 competition will henceforth happen every two years unless the Cricket World Cup is planned for the same year, wherein case it will take place the year before. India beat Pakistan in the final of the first event, which took place in South Africa in 2007. With the 2007 ICC World Cricket League Division One, a 50-over competition held in Nairobi, Kenya, and Scotland had to earn their spots in the tournament. To properly prepare the teams, it was agreed to organize a qualification competition with a 20-over format in December 2007. Six people would result in two qualifying for the 2009 World Twenty20 and winning $250,000 each.

Pakistan won the second tournament by defeating Sri Lanka by 8 wickets on June 21, 2009, in England. England beat Australia by 7 wickets in the 2010 ICC World Twenty20 event, which took place in the West Indies in May of that year. The West Indies defeated Sri Lanka in the championship match to claim the 2012 ICC World Twenty20. The host nation participated in the ICC World Twenty20 final for the first time. There were 12 contestants, including Ireland and Afghanistan who qualified for the 2012 ICC World Twenty20. It was the very first time an Asian nation hosted the T20 World Cup competition.

The 2012 edition was originally going to have a 16-team format; however, it was changed back to 12. The inaugural event with 16 teams, featuring all ten full members and six associate members who qualified through the 2013 ICC World Twenty20 Qualification, was held in Bangladesh in 2014. However, on October 8, 2012, the top eight full-member teams in the ICC Men's T20I Team rankings received a spot in the Super 10 stage. In the group stage, which featured the remaining eight teams, two teams advanced to the Super 10 stage. In this competition, three new teams—Nepal, Hong Kong, as well as the UAE made their debut.

The ICC declared in July 2020 that the pandemic has forced a two-year postponement of the 2021 edition. Thus, the 2020 event (originally scheduled to be held by Australia) was pushed back to November 2022, while the 2021 event (originally scheduled to be hosted by India) was shifted to Oman & the United Arab Emirates because of the pandemic. Both still have the right to host the competitions, with Australia hosting in 2022 and India in 2021. The tournaments in 2021 and 2022 took place between 17 October and 14 November of that year, respectively.

The ICC said in June 2021 that 20 teams will be added to the T20 World Cup competitions in 2024, 2026, 2028, and 2030. The four groups will each have five teams, with the top two teams from each group moving on to the Super Eights. Two groups of four will be formed, with the top two (2) from each group moving on to the semifinals. The West Indies as well as the United States will serve as the 2024 T20 World Cup hosts. The United States will be hosting the World Cup for the first time, and several cricket venues are being built or renovated around the nation. India and Sri Lanka will co-host the event in 2026, with New Zealand and Australia hosting in 2028, and England, Wales, Scotland, and Ireland hosting in 2030.