Orlando began play as an NBA expansion franchise in 1989 and endured several difficult early seasons before winning the draft lottery in 1992 and selecting center Shaquille O'Neal, who was immediately named Rookie of the Year. Pairing O'Neal with point guard Anfernee "Penny" Hardaway, acquired in a 1993 draft-night trade, the Magic quickly became one of the league's most exciting young teams, posting a 57-win season in 1994-95 and reaching the NBA Finals, where they were swept by Houston. O'Neal's departure as a free agent in 1996 and recurring injuries to Hardaway cut the window short, and the franchise spent much of the following years rebuilding around scoring guard Tracy McGrady before bottoming out at a league-low record in 2003-04.

The 2004 drafting of center Dwight Howard gave Orlando a new foundation, and under coach Stan Van Gundy the team won division titles and advanced to the 2009 NBA Finals, losing to the Lakers. Howard's departure in a 2012 trade triggered another extended rebuilding period marked by frequent coaching and front-office changes and only occasional playoff appearances. The 2022 drafting of Paolo Banchero, who won Rookie of the Year, began a more recent competitive turn, with Orlando returning to the playoffs in 2023-24 and capturing division titles again in 2024 and 2025 as part of a young core built around Banchero and Franz Wagner.