A software synthesizer or virtual instrument is a software app or plug-in that generates digital audio, usually for music. Virtual instruments can be played in real time via a MIDI controller, or may be readily interfaced with other music software such as music sequencers typically in the context of digital audio workstation (DAW) software. Virtual instruments exist for essentially every musical instrument type, emulating various types of synthesis, orchestral instruments, drums, guitars, pianos, and even recreations of specific models of hardware synthesizers and classic keyboards.

Mainstream virtual instruments were first introduced in the late 1990s, and popularized by Steinberg's introduction of VST instruments in 1999. As computer processing power increased into the early 2000s, virtual instruments could produce what previously required the dedicated hardware of a conventional synthesizer or sampler. By 2014, virtual instruments had become the second-largest music software product category in terms of revenue, with the first being DAW software.

In 1957, while working at Bell Labs, Max Mathews wrote MUSIC, the first widely accepted program for making music (in actuality, sound) on a digital computer. Barry Vercoe followed Mathews' work with Music 11, and went on to develop the audio programming language Csound at the MIT Media Lab in 1985.

In 1986, Aegis released Sonix for the Commodore Amiga. Alongside a graphical score editor, Sonix leveraged the Amiga's Paula sound chip for a 4-voice software synthesizer. It featured MIDI input, a recognizable user interface, waveform drawing, an envelope, LFO, and non-resonant filter - calculating the synthesized result in real-time and sending it out, polyphonically, to the Amiga's 4 PCM-based channels. In 1988, Digidesign Turbosynth software enabled users to patch together digital signal processing modules with functionality ranging from various forms of synthesis, to filters and a variety of modifiers. The sound produced by the software modules could be exported as samples to be played on a hardware sampler.

In 1994, Seer Systems, under the direction of Sequential founder Dave Smith, demonstrated the first software-based synthesizer running on PC. The second generation of this software synthesizer was licensed to Creative Labs in 1996 for use in their AWE 64 line of soundcards. The third generation, renamed Reality, was released in 1997, and was one of the first commercial software synthesizers. Reality combined various forms of synthesis, including subtractive, additive, PCM, wavetable, FM, and physical modeling, with multi-mode filters, LFOs, and envelopes.

In 1997, Propellerhead Software released ReBirth RB-338, which emulated classic Roland instruments commonly associated with techno: two TB-303 Bass Line synthesizers and a TR-808. A TR-909 drum machine was added in version 2.0. Also in 1997, NemeSys introduced GigaSampler, the first software sample player that could stream samples in real time directly from a hard drive. The same year, Native Instruments (whose name itself referred to software-based instruments) was founded with the Generator modular synthesizer software. Two years later, Generator would be superceded by Reaktor.

In 1999, when Steinberg released Cubase VST 3.7, they updated the VST standard introduced in 1996 to support VST instruments (VSTi), allowing users to run software instruments (including synthesizers) as plug-ins, and releasing the first VSTi, Neon. This helped integrate software synthesizers into DAW software, streamlining usage and triggering a wave of new software instruments. As computers became more powerful, software synthesizers did as well. This led to developments in new forms of synthesis such as granular synthesis. By the early 2000s, several software samplers, such as Emagic's EXS24, Steinberg's HALion, and Native Instruments' Kontakt were available, and shortly thereafter emerged a trend of companies that specialized in sample libraries developing their own sample-based virtual instruments, Software synthesizers utilized sample playback and even physical modelling to imitate instruments ranging from acoustic pianos, drums and percussion, stringed and wind instruments, to electromechanical instruments such as tonewheel organs and electric pianos.

Virtual instruments exist for essentially every musical instrument type, emulating various types of synthesis, orchestral instruments, drums, guitars, pianos, and even recreations of specific models of hardware synthesizers and classic keyboards. Alternately, many virtual instruments are unique.