The Unix operating system was conceived and implemented in the 1960s and first released in 1970. Its wide availability and portability meant that it was widely adopted, copied and modified by academic institutions and businesses, with its design being influential on authors of other systems.

The GNU Project, with the goal of creating a Unix-like, POSIX-compatible operating system composed entirely of free software,[9] began development in 1984, and a year later Richard Stallman had created the Free Software Foundation and wrote the first draft of the GNU General Public License (GPLv1). By the early 1990s, the project had produced or collected many necessary operating system components, including libraries, compilers, text editors, and a Unix shell, and the upper level could be supplied by the X Window System, but development of the lower level, which consisted of a kernel, device drivers and daemons had stalled and was incomplete.[10]

MINIX, a Unix-like system intended for academic use, was released by Andrew S. Tanenbaum in 1987. While source code for the system was available, modification and redistribution were restricted. In addition, MINIX's 16-bit design was not well adapted to the increasingly cheap and popular Intel 386 architecture for personal computers.

In 1991, Linus Torvalds began to work on a non-commercial replacement for MINIX while he was attending the University of Helsinki.[11] This eventually became the Linux kernel. Torvalds intended Linux to be specifically tailored to the capabilities of the 32-bit Intel 386 platform.[12]

Linux was dependent on the Minix userspace at first. With code from the GNU system freely available, it was advantageous if this could be used with the fledgeling OS. Code licensed under the GNU GPL can be used in other projects, so long as they too are released under the GPL. In order to make the Linux kernel compatible with the components from the GNU project, Torvalds changed his original license (which prohibited commercial redistribution) to the GPLv2.[13] Linux and GNU developers worked to integrate GNU components with Linux. Thus Linux became a complete, fully functional free operating system

more at wikipedia