The earliest incarnation of Velvet Revolver was in 1998 when 3 former members of Guns N’ Roses, Slash (guitar), Duff McKagan (bass), and drummer Matt Sorum joined together to record original music for the independent film “Soundman”, written and directed by Steven Ho. The trio played again at a bar concert for musician Randy Castillo in 2002, and subsequently decided to form a new band. Former GN’R guitarist Izzy Stradlin was also initially invited to be the band's rhythm guitarist, but he declined due to his unwillingness to work with a lead singer and his aversion to the life on the road (although Stradlin has since rehearsed & written with the band & occasionally played with them on tour). The band recruited guitarist Dave Kushner, who had previously played with Dave Navarro and Wasted Youth, and had attended school with Slash and worked with McKagan in the band Loaded. The quartet were referred to under the temporary name "The Project", and began to audition for a lead singer, with Canadian Todd Kerns (formerly of Age of Electric), Josh Todd (of Buckcherry), Michael Matijevic (of Steelheart), Sebastian Bach (formerly of Skid Row), Kelly Shaefer (of Atheist/Neurotica) and Travis Meeks (of Days of the New) all taking part. Myles Kennedy (of Alter Bridge and formerly of The Mayfield Four) declined an invitation to audition, as reportedly did Mike Patton (formerly of Faith No More) and Ian Astbury (The Cult). Stone Temple Pilots frontman Scott Weiland had become friends with McKagan (via their respective wives) and had once played on the same bill as Kushner – he became the number one choice for the band but as STP were still touring he declined. However, after the band heard about STP's split in 2003, they approached Weiland, who joined, and suggested the name 'Black Velvet Revolver', as a combination of something intimate and something violent, after Slash had suggested 'Revolver' - this was then shortened to 'Velvet Revolver'.

Velvet Revolver recorded their first track, "Set Me Free", for the soundtrack for the 2003 movie “Hulk”, and also recorded a cover of Pink Floyd's "Money", which is featured in the movie “The Italian Job”. Debut album, ”Contraband” was recorded in the latter part of 2003, released in June 2004, and has sold more than 2 million copies in the US. It contains the single "Slither", which won them the 2005 Grammy Award for “Best Hard Rock Performance”. ”Contraband” was followed by a new song, "Come On, Come In", recorded for the 2005 movie “Fantastic Four”.

Second album ”Libertad” followed in July 2007, with lead single “She Builds Quick Machines” used on the “NASCAR 08” video game. However, in April 2008, it was announced that Weiland had officially left Velvet Revolver (later that month he performed with Stone Temple Pilots for the first time since 2002), and the band have been on indefinite hiatus since, asking in November 2008 to be released from their record label Sony BMG/RCA Records in order to pursue a new frontman on the band's own terms.