William D. Mathews from MIT found a vulnerability in a MulticsCTSS running on an IBM 7094. The standard text editor on the system was designed to be used by one user at a time, working in one directory, and so created a temporary file with a constant name for all instantiations of the editor. The flaw was discovered when two system programmers were editing at the same time and the temporary files for the message-of-the day and the password file became swapped, causing the contents of the system CTSS password file to display to any user logging into the system.
The Warelords forms in The United States, founded by Black Bart (cracker of Dung Beetles in 1982) in St. Louis, Missouri, and was composed of many teenage hackers, phreakers, coders, and largely black hat-style underground computer geeks. One of the more notable group members was Tennessee Tuxedo, a young man who was instrumental with developing conference calls via the use of trunk line phreaking via the use of the Novation Apple Cat II that allowed them to share their current hacks, phreaking codes, and new software releases. Other notable members were The Apple Bandit, Krakowicz, Krac-man, and The Codesmith, who ran the BBS The Trading Post for the group. Black Bart was clever at using his nationally known and very popular BBS system in order to promote the latest gaming software. He used that relationship to his advantage, often shipping the original pre-released software to his most trusted code crackers during the beta-testing phase, weeks prior to their public release. The Warelords often collaborated with other piracy groups at the time, such as The Syndicate and The Midwest Pirates Guild, and developed an international ring of involved piracy groups that reached as far away as Japan. Long before the movie WarGames went into pre-production, The Warelords had successfully infiltrated such corporations and institutions as the White House, Southwestern Bell "Ma Bell" Mainframe Systems, and large corporate providers of voice mail systems.
The group KILOBAUD is formed in February, kicking off a series of other hacker groups which form soon after.
The movie WarGames introduces the wider public to the phenomenon of hacking and creates a degree of mass paranoia of hackers and their supposed abilities to bring the world to a screeching halt by launching nuclear ICBMs.
The U.S. House of Representatives begins hearings on computer security hacking.
Someone calling himself Lex Luthor founds the Legion of Doom. Named after a Saturday morning cartoon, the LOD had the reputation of attracting "the best of the best"—until one of the most talented members called Phiber Optik feuded with Legion of Doomer Erik Bloodaxe and got 'tossed out of the clubhouse'. Phiber's friends formed a rival group, the Masters of Deception.
The hacker magazine 2600 begins regular publication, right when TAP was putting out its final issue. The editor of 2600, "Emmanuel Goldstein" (whose real name is Eric Corley), takes his handle from the leader of the resistance in George Orwell's 1984. The publication provides tips for would-be hackers and phone phreaks, as well as commentary on the hacker issues of the day. Today, copies of 2600 are sold at most large retail bookstores.
William Gibson's groundbreaking science fiction novel Neuromancer, about "Case", a futuristic computer hacker, is published. Considered the first major cyberpunk novel, it brought into hacker jargon such terms as "cyberspace", "the matrix", "simstim", and "ICE".
The FBI, Secret Service, Middlesex County NJ Prosecutor's Office and various local law enforcement agencies execute seven search warrants concurrently across New Jersey on July 12, 1985, seizing equipment from BBS operators and users alike for "complicity in computer theft", under a newly passed, and yet untested criminal statue. This is famously known as the Private Sector Bust, or the 2600 BBS Seizure, and implicated the Private Sector BBS sysop, Store Manager (also a BBS sysop), Beowulf, Red Barchetta, The Vampire, the NJ Hack Shack BBS sysop, and the Treasure Chest BBS sysop.
Arrest of a hacker who calls himself The Mentor. He published a now-famous treatise shortly after his arrest that came to be known as the Hacker's Manifesto in the e-zine Phrack. This still serves as the most famous piece of hacker literature and is frequently used to illustrate the mindset of hackers.
The Morris Worm. Graduate student Robert T. Morris, Jr. of Cornell University launches a worm on the government's ARPAnet (precursor to the Internet). The worm spreads to 6,000 networked computers, clogging government and university systems. Morris is dismissed from Cornell, sentenced to three years probation, and fined $10,000.
Operation Sundevil introduced. After a prolonged sting investigation, Secret Service agents swoop down on organizers and prominent members of BBSs in 14 U.S. cities including the Legion of Doom, conducting early-morning raids and arrests. The arrests involve and are aimed at cracking down on credit-card theft and telephone and wire fraud. The result is a breakdown in the hacking community, with members informing on each other in exchange for immunity. The offices of Steve Jackson Games are also raided, and the role-playing sourcebook GURPS Cyberpunk is confiscated, possibly because the government fears it is a "handbook for computer crime". Legal battles arise that prompt the formation of the Electronic Frontier Foundation, including the trial of Knight Lightning.
Australian federal police tracking Realm members Phoenix, Electron and Nom are the first in the world to use a remote data intercept to gain evidence for a computer crime prosecution.
The Computer Misuse Act 1990 is passed in the United Kingdom, criminalising any unauthorised access to computer systems.
Publication of a hacking instruction manual for penetrating TRW credit reporting agency by Infinite Possibilities Society (IPS) gets Dr. Ripco, the sysop of Ripco BBS mentioned in the IPS manual, arrested by the US Secret Service.
The first DEF CON hacking conference takes place in Las Vegas. The conference is meant to be a one-time party to say good-bye to BBSs (now replaced by the Web), but the gathering was so popular it became an annual event.
Summer: Russian crackers siphon $10 million from Citibank and transfer the money to bank accounts around the world. Vladimir Levin, the 30-year-old ringleader, uses his work laptop after hours to transfer the funds to accounts in Finland and Israel. Levin stands trial in the United States and is sentenced to three years in prison. Authorities recover all but $400,000 of the stolen money.
Hackers adapt to emergence of the World Wide Web quickly, moving all their how-to information and hacking programs from the old BBSs to new hacker Web sites.
The U.S. General Accounting Office reports that hackers attempted to break into Defense Department computer files some 250,000 times in 1995 alone. About 65 percent of the attempts were successful, according to the report.
The MP3 format gains popularity in the hacker world. Many hackers begin setting up sharing sites via FTP, Hotline, IRC and Usenet.
In response to the MP3 popularity, the Recording Industry Association of America begins cracking down on FTPs . The RIAA begins a campaign of lawsuits shutting down many of the owners of these sites including the more popular ripper/distributors The Maxx (Germany, Age 14), Chapel976 (USA, Age 15), Bulletboy (UK, Age 16), Sn4rf (Canada, Age 14) and others in their young teens via their ISPs. Their houses are raided and their computers and modems are taken. The RIAA fails to cut off the head of the MP3 beast and within a year and a half, Napster is released.
January: Yahoo! notifies Internet users that anyone visiting its site in recent weeks might have downloaded a logic bomb and worm planted by hackers claiming a "logic bomb" will go off if Kevin Mitnick is not released from prison.
Software security goes mainstream In the wake of Microsoft's Windows 98 release, 1999 becomes a banner year for security (and hacking). Hundreds of advisories and patches are released in response to newfound (and widely publicized) bugs in Windows and other commercial software products. A host of security software vendors release anti-hacking products for use on home computers.
The Electronic Civil Disobedience project, an online political performance-art group, attacks the Pentagon calling it conceptual art and claiming it to be a protest against the U.S. support of the suppression of rebels in southern Mexico by the Mexican government. ECD uses the FloodNet software to bombard its opponents with access requests.
U.S. President Bill Clinton announces a $1.46 billion initiative to improve government computer security. The plan would establish a network of intrusion detection monitors for certain federal agencies and encourage the private sector to do the same.
January 7: an international coalition of hackers (including CULT OF THE DEAD COW, 2600 's staff, Phrack's staff, L0pht, and the Chaos Computer Club) issued a joint statement () condemning the LoU's declaration of war. The LoU responded by withdrawing its declaration.
A hacker interviewed by Hilly Rose during the Art Bell Coast-to-Coast Radio Show exposes a plot by Al-Qaida to derail Amtrak trains. This results in ALL trains being forcibly stopped over Y2K as a safety measure.
March: The Melissa worm is released and quickly becomes the most costly malware outbreak to date.
May: The ILOVEYOU worm, also known as VBS/Loveletter and Love Bug worm, is a computer worm written in VBScript. It infected millions of computers worldwide within a few hours of its release. It is considered to be one of the most damaging worms ever. It originated in the Philippines; made by an AMA Computer College student for his thesis.
September: teenage hacker Jonathan James becomes first juvenile to serve jail time for hacking.
August: Researcher Chris Paget publishes a paper describing "shatter attacks", detailing how Windows' unauthenticated messaging system can be used to take over a machine. The paper raises questions about how securable Windows could ever be. It is however largely derided as irrelevant as the vulnerabilities it described are caused by vulnerable applications (placing windows on the desktop with inappropriate privileges) rather than an inherent flaw within the Operating System.
November 3: Jeanson James Ancheta, whom prosecutors say was a member of the "Botmaster Underground", a group of script kiddies mostly noted for their excessive use of bot attacks and propagating vast amounts of spam, was taken into custody after being lured to FBI offices in Los Angeles.
January: One of the few worms to take after the old form of malware, destruction of data rather than the accumulation of zombie networks to launch attacks from, is discovered. It had various names, including Kama Sutra (used by most media reports), Black Worm, Mywife, Blackmal, Nyxem version D, Kapser, KillAV, Grew and CME-24. The worm would spread through e-mail client address books, and would search for documents and fill them with garbage, instead of deleting them to confuse the user. It would also hit a web page counter when it took control, allowing the programmer who created it as well as the world to track the progress of the worm. It would replace documents with random garbage on the third of every month. It was hyped by the media but actually affected relatively few computers, and was not a real threat for most users.
May: Jeanson James Ancheta receives a 57-month prison sentence,  and is ordered to pay damages amounting to $15,000.00 to the Naval Air Warfare Center in China Lake and the Defense Information Systems Agency, for damage done due to DDoS attacks and hacking. Ancheta also had to forfeit his gains to the government, which include $60,000 in cash, a BMW, and computer equipment .
May: Largest Defacement in Web History, at that time, is performed by the Turkish hacker iSKORPiTX who successfully hacked 21,549 websites in one shot. 
July: Robert Moore and Edwin Pena featured on Americas Most Wanted with Kevin Mitnick presenting their case commit the first VOIP crime ever seen in the USA. Robert Moore served 2 years in federal prison with a $152,000.00 restitution while Edwin Pena was sentenced to 10 years and a $1 million restitution.
September: Viodentia releases FairUse4WM tool which would remove DRM information off WMA music downloaded from music services such as Yahoo Unlimited, Napster, Rhapsody Music and Urge.
January 12: Operation Aurora Google publicly reveals that it has been on the receiving end of a "highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google"
June: Stuxnet The Stuxnet worm is found by VirusBlokAda. Stuxnet was unusual in that while it spread via Windows computers, its payload targeted just one specific model and type of SCADA systems. It slowly became clear that it was a cyber attack on Iran's nuclear facilities - with most experts believing that Israel was behind it - perhaps with US help.
December 3: The first Malware Conference, MALCON takes place in India. Founded by Rajshekhar Murthy, Malware coders are invited to showcase their skills at this annual event supported by the Government of India. An advanced malware for Symbian OS is released by hacker A0drul3z.
April 9: Bank Of America website hacked by Turkish hacker JeOPaRDY. This time the FBI accuses him of stealing 85,000 credit card numbers and accounts. Bank officials say no personal customer bank information is available on that web-page. Only information about bank products and services. An investigation is now being conducted by the F.B.I
November 1: The main phone and Internet networks of the Palestinian territories sustained a hacker attack from multiple locations worldwide.
November 7: The forums for Valve's Steam service were hacked. Redirects for a hacking website, Fkn0wned, appeared on the Steam Users' Forums, offering "hacking tutorials and tools, porn, free giveaways and much more.
December 14: Five members of the Norwegian hacker group Noria was arrested, allegedly suspected for hacking into the email account of the militant extremist Anders Behring Breivik
Saudi hacker, 0xOmar, published over 400,000 credit cards online, and threatened Israel to release 1 million credit cards in the future.
In response to that incident, an Israeli hacker published over 200 Saudi's credit cards online.
January 6: Hacker group The Hacker Encrypters found and reported an open SQLi exploit on Facebook. The results of the exploit have been posted on Pastebin.
January 7: Team Appunity, a group of Norwegians hackers, got arrested for breaking into and publishing the user database of Norway's largest prostitution website.
February 3: Marriott was hacked by a new age ideologist, Attila Nemeth who was resisting against the New World Order where Corporations Rule the World. As a response Marriott reported him to the United States Secret Service.
February 8: Foxconn is hacked by rising hacker group, Swagg Security, releasing a massive amount of data including email logins, server logins, and even more alarming - bank account credentials of large companies like Apple and Microsoft. Swagg Security stages the attack just as a Foxconn protest ignites against terrible working conditions
May 4: A lot of important Turkish Websites are hacked by F0RTYS3V3N (Turkish Hacker) . Google, Yandex, Microsoft, Gmail, Msn, Hotmail, PayPal Turkish representative offices ' s Websites hacked in one shot.
May 24 WHMCS is hacked by UGNazi, they claim that the reason for this is because of the illegal sites that are using their software.
May 31: MyBB is hacked by newly founded hack group, UGNazi, the website was defaced for about a day, they claim their reasoning for this was because they were upset that the forum board Hackforums.net uses their software.
October 7: Farmers Insurance, MasterCard, and several other high-level government sites are hacked by Swagg Security. Released is several thousand usernames and logins, as well as other confidential information.
February 18: Burger King's Twitter account 'hacked' with McDonald's logo  According to Anonymous, it was due to the horse meat scandal in Europe. An account named "iThug" was responsible for the hack. As a result, iThug's account was suspended.
February 7: The Bitcoin exchange Mt.Gox filed for bankruptcy after $460million was apparently stolen by hackers due to "weaknesses in [their] system" and another $27.4million went missing from its bank accounts.