The band's history began in 1976, and was originally called 'The Cut' during their formative years with Gary Kemp as singer/songwriter and Steve Norman on guitar, later saxophone and percussion. Gary and Steve were both attending Dame Alice Owen's School, Islington (which later moved to Potters Bar), and were close friends. They shared a similar interest in music and a common desire to form a band. Next came fellow student John Keeble, who had met Steve when they both discovered the drum kit in the school’s music room, and would regularly meet at lunchtimes to practice. Following John in joining the band was bass player Michael Ellison, and after that was Tony Hadley as lead singer, who approached Steve Norman one day in the 6th form common room. After a few months, Richard Miller replaced Michael Ellison on bass, before Gary's brother Martin Kemp finally took over the role, joining the band a couple of years later. By this time, the band had already played some considerable gigs and had gained live experience, which would eventually prove fruitful. Steve Dagger, a friend of the band members, was then asked by Steve and Gary to manage them. He was to be an integral part of the band's initial and continuing success.

The band was called 'The Makers' in the early years, but profess to have changed their name after a friend’s (BBC London 94.9 DJ Robert Elms) visit to Spandau, a borough of Berlin, the inspiration being from graffiti he saw in the lavatory of a club there. The term Spandau Ballet referred to the spasms of the Nazi war criminals as they "danced at the end of the rope", when they were hanged at Spandau Prison. This is a contentious point. The more likely source of the name came in fact from graffiti on the wall of a lavatory in The Venue, London (Victoria) around 1980, where members of the originally named band worked. These members were; (Michael J) Mick Austin (now artist), David Wardill (later David Agar of The Passions), and Mark Robinson (musician). They had been playing under the name Spandaux Ballet since 1978 and had played in London once under this name at the Hope & Anchor, Islington, London on 6 May 1979 supporting The Softies. The new Spandau Ballet, with Martin Kemp and Tony Hadley, began performing with this name and generating a positive buzz around London. Their music prior to then was very R&B in the style of the early Rolling Stones or The Kinks, but became more electronic as they started to hang out in clubs such as Billys and Blitz nightclub, where they would listen to bands like Kraftwerk and Telex. The Blitz was regarded as the birthplace of a new 1980s music and fashion phenomenon called New Romanticism.

The band was involved in a major bidding war. They eventually signed to Chrysalis Records and released "To Cut a Long Story Short", produced by the cutting-edge electronic musician Richard James Burgess. Released just ten days after the band emerged from the studio in order to meet the huge demand created by the buzz they had established, "To Cut a Long Story Short" was an instant British top 5 hit in 1980. This was followed by hits with "The Freeze", "Musclebound" and the well-received and genre-defining Gold certified album Journeys to Glory (February 1981). The sound of Journeys to Glory made way for the nascent New Romantic movement with chanted vocals, club/dance bottom end, splashy snare drum sound, lack of guitar solos and strongly rhythmic guitar parts.

The follow-up album Diamond (March 1982) also produced by Richard James Burgess was certified Gold by the BPI and featured the influential funk-flavoured single "Chant No. 1". The band had Burgess remix every single from both albums for inclusion on each single's B-side and for twelve-inch club releases. These mixes were later released as a boxed set. However, times were changing; and these were the days of Dollar and Bucks Fizz, and the British charts were swinging away from the edgier New Romantic sound created by the band and Burgess. The second chart single from Diamond was "Paint Me Down", which broke their run of top 20 hits by stalling at #30, and the third single, "She Loved Like Diamond", failed to make the UK Top 40 at all. Trevor Horn remixed the track "Instinction" which was released as the fourth single from the album, and which returned the band to the UK top ten after the poor chart performance of their previous two singles and of the Diamond album in general which had peaked at #15.

With a slicker, adult contemporary sound, the band released their third album True in (March 1983), produced by Tony Swain and Steve Jolley, who would go on to enjoy a couple of years as the "producers du jour" in Britain. The title cut was a six-minute opus paying tribute to the Motown sound (and in some respects, Marvin Gaye). The image changed too; the cossack outfits and makeup of the New Romantic movement they had helped to establish had been replaced by smart, 1940s-inspired suits and well-scrubbed faces. The band still looked vaguely aristocratic, however. It was at this point that Steve Norman became the band's sax player. The album topped the charts all around the world, and launched several international hit singles, such as "Gold" and the aforementioned title cut which was #1 in several countries.

The follow up, Parade (June 1984) and its singles were again big successes in the European charts, Australia and Canada, and the opening song "Only When You Leave" became their last American hit. At the end of 1984, the band performed on the Band Aid charity single, with Hadley taking a prominent lead vocal role; and in 1985, they performed at the Wembley Stadium end of Live Aid. During this same year, Spandau Ballet achieved platinum status with the compilation, The Singles Collection, which kept the focus on the band between two studio albums, and celebrated their five years of success. In 1986, Spandau Ballet signed to CBS Records and released Through the Barricades (October 1986), which saw the band trying to move away from the pop/soul influences of True and Parade and more towards rock. The album, the title track and the single "Fight For Ourselves" were big hits in their native UK, in Europe - particularly in Germany, Italy and in the Benelux as usual - and in Australia, but not in the United States.

After a hiatus from recording during which the Kemps established themselves as credible actors in the gangster film The Krays, the band released Heart Like a Sky in September 1989. The album was not widely released (not at all in the US) and was for the most part disregarded. It did, however, do well in Italy. Afterwards, Spandau Ballet — from whom Gary Kemp was already feeling estranged — split up for good.

Martin Kemp went on to land an acting role in the UK soap opera EastEnders, while Tony Hadley tried to establish a solo career. Gary Kemp did a little more acting, appearing in a supporting role in the Whitney Houston hit The Bodyguard, and in 1996 released the commercially unsuccessful solo album, Little Bruises. In the 1990s, Hadley, Norman and Keeble launched a failed court case against Gary Kemp for a share of Kemp's song writing royalties. Since then Hadley's profile has been raised by his winning the ITV reality show Reborn in the USA.

The three non-Kemp members toured as a trio, but as they had to sell their shares in Spandau Ballet's company to Gary Kemp to pay off legal debts, and that company owned the rights to the name of Spandau Ballet, they had to tour under the moniker of 'Hadley, Norman and Keeble, ex-Spandau Ballet'.

Steve Norman and the Kemps have since managed to put their differences behind them and a reunion tour has been mentioned.

Recently Martin Kemp has become the face of SCS Sofas stores, Gary Kemp has been writing songs with Paul Stratham who has previously written songs for Dido, Steve Norman is now a member of 'Cloudfish' the band he formed with Shelley Preston, and Tony Hadley has released a swing album and landed the lead role in the musical Chicago.

In December 2007, unconfirmed reports indicated that the entire lineup of Spandau Ballet had agreed to reunite to perform a show at a Las Vegas luxury property for £2-million.

On Monday May 12th, 2008, Tony Hadley can be quoted to have said that a reunion for the 30th anniversary of the band's formation or otherwise is highly unlikely and that rumours of him having said there might be one are unfounded.