Signal-correlation techniques were first experimentally applied to fluorescence in 1972 by Magde, Elson, and Webb, who are therefore commonly credited as the "inventors" of FCS. The technique was further developed in a group of papers by these and other authors soon after, establishing the theoretical foundations and types of applications. 
Around 1990, with the ability of detecting sufficiently small number of fluorescence particles, two issues emerged: A non-Gaussian distribution of the fluorescence intensity and the three-dimensional confocal Measurement Volume of a laser-microscopy system.  The former led to an analysis of distributions and moments of the fluorescent signals for extracting molecular information, which eventually became a collection of methods known as Brightness Analyses. See Thompson (1991) for a review of that period.
Beginning in 1993, a number of improvements in the measurement techniques&mdash;notably using confocal microscopy, and then two-photon microscopy&mdash;to better define the measurement volume and reject background&mdash;greatly improved the signal-to-noise ratio and allowed single molecule sensitivity. Since then, there has been a renewed interest in FCS, and as of August 2007 there have been over 3,000 papers using FCS found in Web of Science. See Krichevsky and Bonnet for a review. In addition, there has been a flurry of activity extending FCS in various ways, for instance to laser scanning and spinning-disk confocal microscopy (from a stationary, single point measurement), in using cross-correlation (FCCS) between two fluorescent channels instead of autocorrelation, and in using Förster Resonance Energy Transfer (FRET) instead of fluorescence.