WSDOT was founded as the Washington State Highway Board and the Washington State Highways Department on March 13, 1905, when then-governor Albert Mead signed a bill that gave $110,000 USD to fund new roads that linked the state. The State Highway Board was managed by State Treasurer, State Auditor, and Highway Commissioner Joseph M. Snow and the Board first met on April 17, 1905 to plan the 12 original state roads. The first state highway districts, each managed by a District Engineer, were established in 1918. During this period, the construction of highways began.
In 1921, the State Highway Board was replaced by the Washington Highway Committee and the Washington State Highways Department became a division of the Washington State Department of Public Works. The first gas tax (1¢ per gallon) was levied and Homer Hadley started planning a pontoon bridge across Lake Washington, which would later become the Lacey V. Murrow Memorial Bridge, which opened on July 2, 1940. In 1923, the State Highways Department separated from the Public Works Department and organized the first official system of highways, Washington's state road system. In 1926, the U.S. government approved the U.S. route system, which connected the country by road. 11 U.S. Routes entered Washington at the time. Later in 1929, the Highway Committee was merged with the State Highways Department. The Lake Washington Floating Bridge and the original Tacoma Narrows Bridge opened in 1940. The Tacoma Narrows Bridge collapsed because of winds on November 7, 1940, earning it the name Galloping Gertie. On June 29, 1956, President Dwight Eisenhower signed the Federal Aid Highway Act of 1956, which started the Interstate Highway System. Originally, 2 Interstates entered Washington.
Starting in 1961, the Interstate Highways started to be built. There were 2 more Interstates to build and most work was not completed until the 1970s. In 1964, the Highways Department was renamed to WSDOT and the state highways were renumbered to the current system. Metro Transit was created in 1972 and work on highways continued very fast. The North Cascades Highway (SR 20) was completed in 1972 and the first HOV lanes in Washington were installed on SR 520 in 1972. The Washington State Transportation Commission was established in 1977 and the first meeting was held on September 21, 1977.
On February 13, 1979, the western pontoons of the Hood Canal Bridge were swept away by a wind storm. In 1980, Mount St. Helens erupted and caused damage to many state highways, mainly SR 504. The Hood Canal Replacement Bridge opened on October 3, 1982 and the Lacey V. Murrow Memorial Bridge collapsed on November 25, 1990.
In 1991, a smaller renumbering of state highways occurred. The renumbering produced some new highways and either realigned or removed highways from the system. In 1996, Sound Transit was formed and in the same year, the Washington State Transportation Commission adopted its first 20-year transportation plan. Throughout the 1990s, WSDOT focused more and more on rail systems and partnered with Amtrak to make a train route that went from Canada to Oregon, which would later become the Amtrak Cascades. The 2001 Nisqually earthquake damaged most state highways around the Seattle metropolitan area and most of the budget was turned over to the Puget Sound region to help rebuild and repair roads and bridges.