E-mu Systems was founded in 1971 and began business as a manufacturer of microprocessor chips, digital scanning keyboards and components for electronic instruments. Licensing this technology gave E-mu ample funds to invest in research and development, and it began to develop boutique synthesizers for niche markets, including a series of modular synthesizers and the high-end Audity system. In 1979, founders Scott Wedge and Dave Rossum saw the Fairlight CMI and the Linn LM-1 at a convention, inspiring them to design and produce a less expensive keyboard that made use of digital sampling.
Originally, E-mu considered selling the design for the Emulator to Sequential Circuits, which at the time was using E-mu's keyboard design in its popular Prophet-5 synthesizer. However, soon afterward, Sequential Circuits stopped paying E-mu royalties on its keyboard design, which forced E-mu to release the Emulator itself.