The airline was founded as Ostfriesische Lufttaxi (OLT) in 1958 and became Ostfriesische Lufttransport (OLT) in 1970 (which existed until 2013 as a separate airline) in Emden. It was reorganised and renamed as DLT Luftverkehrsgesellschaft mbH on 1 October 1974 and began cooperation with Lufthansa in 1978 with short-range international routes.
By 1988 all operations were on behalf of Lufthansa. In March 1992 DLT became a wholly owned subsidiary of Lufthansa and was renamed Lufthansa CityLine. Lufthansa CityLine counts 2,332 employees, of whom 664 work in the cockpit, 849 in the cabin and 819 on the ground in the technical and administrative areas (as of December 31, 2011).
On 28 December 1999, a passenger on board Lufthansa Flight 5293 from Prague to Düsseldorf, which was operated by Lufthansa CityLine using a Bombardier CRJ100 aircraft (registered D-ACJA), claimed to have a bomb on board and demanded the flight be diverted to the United Kingdom. The pilots convinced him to have a fuel stop at Düsseldorf International Airport, where all passengers left the plane (many of them unaware of the hijacking attempt), and the perpetrator was arrested.