Kaiser Jeep resulted from the 1953 merger of Kaiser Motors, an independent passenger car maker based in Willow Run, Michigan, with the Toledo, Ohio-based Willys-Overland Company.

Willys-Overland had been at one point before World War II the U.S.'s second-largest car-maker after Ford, but their fortunes waned during the 1930s. Willys survived during the war by getting the primary contract to build the U.S. World War II jeeps for the American and Allied armed forces. From 1945, Willys focused almost exclusively on selling Jeep-branded vehicles, both civilian and commercial, as well as government and military jeeps.

For Kaiser, the Jeep brand and its models were considered the crown jewels in the merger with Willys-Overland. In 1955, Kaiser phased out all Kaiser and Willys passenger car lines, and Kaiser (initially still under the name 'Willys Motors') became entirely focused on Jeep products in most markets. In 1963, the company consolidated all corporate holdings under the name of Kaiser Jeep Corporation, discarding the Willys name.

Following this, American Motors Corporation (AMC) negotiated with Kaiser Jeep to purchase the company. The deal was finalized in 1970, and Kaiser Jeep became "Jeep Corporation," a wholly owned subsidiary of AMC.

Founded by John North Willys, Willys-Overland was successful in car making. At one point, Willys-Overland was the U.S.'s second-largest car maker after Ford, but their success waned during the 1930s. Willys benefited from the production during World War II by winning the primary contract to build Willys MB 1⁄4‑ton jeeps for the U.S. and Allied armed forces to the factory's maximum capacity. Willys also began almost immediately to brand the term "Jeep" through advertising, applying to trademark it in 1943, and receiving the "Jeep" trademark in 1950. From 1945, Willys focused almost exclusively on selling Jeep branded vehicles, civilian and commercial, as well as utility and military jeeps for (the U.S.) governments.

While Joseph W. Frazer, earlier a one-time president of Willys-Overland, had left Kaiser-Frazer ca. 1950, going it alone, Henry J. Kaiser's finances ultimately dictated that he could no longer compete with the established manufacturers in the U.S. passenger car business, but he saw value in Willys' Jeep line. Thus, Kaiser pursued a merger between Kaiser Motors and Willys, arranged in 1953, and the assets were bundled into Kaiser-Willys Corporation. Willys-Overland was renamed Willys Motors at first, and for the next ten years.

In 1955, Kaiser phased out both the Kaiser and Willys passenger car lines and shipped the dies to Argentina, where the joint venture with the Argentine government-owned Industrias Kaiser Argentina (IKA) continued to build cars through 1977, when Renault took over.

Under Kaiser's management, Jeep introduced the Forward Control vans and the groundbreaking Wagoneer, which offered unprecedented comfort and available (luxury) options combined with serious off-road capability.