"Microcomputer" is an antiquated term that refers to a computer that uses a microprocessor (integrated circuit) for its Central Processing Unit, rather than vacuum tubes or bipolar junction transistors, which were commonplace before the microprocessor. In addition, a microcomputer should be small enough to fit on a desk, as microprocessor-based computers larger than that are generally called minicomputers instead. Microprocessor-based computers are the backbone of the modern computer era, often considered "third generation" computers in contrast to the first and second generation of vacuum tubes and bipolar junction transistors. Today, almost all computers are microcomputers.

Computers were relatively slow and expensive throughout the 1940s, 1950s, and 1960s, often necessitating large amounts of power and room-sized mainframes. Even a computer the size of a refrigerator would be called a "minicomputer" due to its relatively small size. At this point, computers were only available to the government, universities, and large companies, and had to be used on timeshare. However, in 1958, Jack Kilby, with Texas Semiconductor, invented the integrated circuit, which opened up the possibility of much smaller computers.

In the late 1960s and early 1970s, minicomputers carried the day, being based on integrated circuits but too large to be called microcomputers. As early as 1956, Isaac Asimov wrote about the possibility of small personal computers, and by the mid-1970s, they had become technologically possible. In 1974, Intel released the Intel 8080, what has been called the first truly usable microprocessor. This microprocessor was then installed in numerous computers, such as the Altair 8800, which were the first true microcomputers. Among the early users were Bill Gates and Steve Ballmer, roommates at Harvard that would go on to found the software behemoth Microsoft. The early arcade game Space Invaders ran on a microcomputer powered by the 8080.

In the early and mid-1980s, microcomputers began to slowly edge out of the realm of the nerd and into the mainstream. The Apple II, which launched Apple Computer to fame, had been released in 1977, and more and more people began to realize its utility for business and in education. Throughout the 1980s, Apple released more machines that were progressively smaller and more powerful, increasing the appeal of microcomputers. Numerous competitors emerged, running operating systems like DOS and Windows. Today, there are over a billion computers in use worldwide.