The beginnings of the hacker culture as we know it today can be conveniently dated to 1961, the year MIT acquired the first PDP-1. The Signals and Power committee of MIT's Tech Model Railroad Club adopted the machine as their favorite tech-toy and invented programming tools, slang, and an entire surrounding culture that is still recognizably with us today. These early years have been examined in the first part of Steven Levy's book Hackers [Levy] .
MIT's computer culture seems to have been the first to adopt the term `hacker'. The Tech Model Railroad Club's hackers became the nucleus of MIT's Artificial Intelligence Laboratory, the world's leading center of AI research into the early 1980s. Their influence was spread far wider after 1969, the first year of the ARPANET.
The ARPANET was the first transcontinental, high-speed computer network. It was built by the Defense Department as an experiment in digital communications, but grew to link together hundreds of universities and defense contractors and research laboratories. It enabled researchers everywhere to exchange information with unprecedented speed and flexibility, giving a huge boost to collaborative work and tremendously increasing both the pace and intensity of technological advance.
But the ARPANET did something else as well. Its electronic highways brought together hackers all over the U.S. in a critical mass; instead of remaining in isolated small groups each developing their own ephemeral local cultures, they discovered (or re-invented) themselves as a networked tribe.
The first intentional artifacts of the hacker culture --- the first slang lists, the first satires, the first self-conscious discussions of the hacker ethic --- all propagated on the ARPANET in its early years. In particular, the first version of the Jargon File developed as a cross-net collaboration during 1973-1975. This slang dictionary became one of the culture's defining documents. It was eventually published as "The Hacker's Dictionary" in 1983; that first version is out of print, but a revised and expanded version is New Hacker's Dictionary [Raymond] .
Hackerdom flowered at the universities connected to the net, especially (though not exclusively) in their computer science departments. MIT's AI Lab was first among equals from the late 1960s. But Stanford University's Artificial Intelligence Laboratory (SAIL) and Carnegie-Mellon University (CMU) became nearly as important. All were thriving centers of computer science and AI research. All attracted bright people who contributed great things to the hacker culture, on both the technical and folkloric levels.
To understand what came later, though, we need to take another look at the computers themselves; because the Lab's rise and its eventual fall were both driven by waves of change in computing technology.
Since the days of the PDP-1, hackerdom's fortunes had been woven together with Digital Equipment Corporation's PDP series of minicomputers. DEC pioneered commercial interactive computing and time-sharing operating systems. Because their machines were flexible, powerful, and relatively cheap for the era, lots of universities bought them.
Cheap timesharing was the medium the hacker culture grew in, and for most of its lifespan the ARPANET was primarily a network of DEC machines. The most important of these was the PDP-10, first released in 1967. The 10 remained hackerdom's favorite machine for almost fifteen years; TOPS-10 (DEC's operating system for the machine) and MACRO-10 (its assembler) are still remembered with nostalgic fondness in a great deal of slang and folklore.
MIT, though it used the same PDP-10s as everyone else, took a slightly different path; they rejected DEC's software for the PDP-10 entirely and built their own operating system, the fabled ITS.
ITS stood for `Incompatible Timesharing System' which gives one a pretty good fix on the MIT hackers' attitude. They wanted it their way. Fortunately for all, MIT's people had the intelligence to match their arrogance. ITS, quirky and eccentric and occasionally buggy though it always was, hosted a brilliant series of technical innovations and still arguably holds the record for time-sharing system in longest continuous use.
ITS itself was written in assembler, but many ITS projects were written in the AI language LISP. LISP was far more powerful and flexible than any other language of its day; in fact, it is still a better design than most languages of today, twenty-five years later. LISP freed ITS's hackers to think in unusual and creative ways. It was a major factor in their successes, and remains one of hackerdom's favorite languages.
Many of the ITS culture's technical creations are still alive today; the EMACS program editor is perhaps the best-known. And much of ITS's folklore is still `live' to hackers, as one can see in the Jargon File.
SAIL and CMU weren't asleep, either. Many of the cadre of hackers that grew up around SAIL's PDP-10 later became key figures in the development of the personal computer and today's window/icon/mouse software interfaces. Meanwhile hackers at CMU were doing the work that would lead to the first practical large-scale applications of expert systems and industrial robotics.
Another important node of the culture was XEROX PARC, the famed Palo Alto Research Center. For more than a decade, from the early 1970s into the mid-1980s, PARC yielded an astonishing volume of groundbreaking hardware and software innovations. The modern mice, windows, and icons style of software interface was invented there. So was the laser printer, and the local-area network; and PARC's series of D machines anticipated the powerful personal computers of the 1980s by a decade. Sadly, these prophets were without honor in their own company; so much so that it became a standard joke to describe PARC as a place characterized by developing brilliant ideas for everyone else. Their influence on hackerdom was pervasive.
The ARPANET and the PDP-10 cultures grew in strength and variety throughout the 1970s. The facilities for electronic mailing lists that had been used to foster cooperation among continent-wide special-interest groups were increasingly also used for more social and recreational purposes. DARPA deliberately turned a blind eye to all the technically `unauthorized' activity; it understood that the extra overhead was a small price to pay for attracting an entire generation of bright young people into the computing field.
Perhaps the best-known of the `social' ARPANET mailing lists was the SF-LOVERS list for science-fiction fans; it is still very much alive today, in fact, on the larger `Internet' that ARPANET evolved into. But there were many others, pioneering a style of communication that would later be commercialized by for-profit time-sharing services like CompuServe, GEnie and Prodigy (and later still dominated by AOL).
Your historian first became involved with the hacker culture in 1977 through the early ARPANET and science-fiction fandom. From then onward, I personally witnessed and participated in many of the changes described here.