In the beginning was the CERN HTTP server. In addition to functioning as an HTTP server, it was also the first caching proxy. The caching module was written by Ari Luotonen in 1994.
That same year, the Internet Research Task Force Group on Resource Discovery (IRTF-RD) started the Harvest project. It was "an integrated set of tools to gather, extract, organize, search, cache, and replicate" Internet information. I joined the Harvest project near the end of 1994. While most people used Harvest as a local (or distributed) search engine, the Object Cache component was quite popular as well. The Harvest cache boasted three major improvements over the CERN cache: faster use of the filesystem, a single process design, and caching hierarchies via the Internet Cache Protocol.
Towards the end of 1995, many Harvest team members made the move to the exciting world of Internet-based startup companies. The original authors of the Harvest cache code, Peter Danzig and Anawat Chankhunthod, turned it into a commercial product. Their company was later acquired by Network Appliance. In early 1996, I joined the National Laboratory for Applied Network Research (NLANR) to work on the Information Resource Caching (IRCache) project, funded by the National Science Foundation. Under this project, we took the Harvest cache code, renamed it Squid, and released it under the GNU General Public License.
Since that time Squid has grown in size and features. It now supports a number of cool things such as URL redirection, traffic shaping, sophisticated access controls, numerous authentication modules, advanced disk storage options, HTTP interception, and surrogate mode (a.k.a. HTTP server acceleration).
Funding for the IRCache project ended in July 2000. Today, a number of volunteers continue to develop and support Squid. We occasionally receive financial or other types of support from companies that benefit from Squid.
Looking towards the future, we are rewriting Squid in C++ and, at the same time, fixing a number of design issues in the older code that are limiting to new features. We are adding support for protocols such as Edge Side Includes (ESI) and Internet Content Adaptation Protocol (ICAP). We also plan to make Squid support IPv6. A few developers are constantly making Squid run better on Microsoft Windows platforms. Finally, we will add more and more HTTP/1.1 features and work towards full compliance with the latest protocol specification.