Craig Ferguson hosted a series of guest episodes in October and November 2004 following Craig Kilborn's departure, culminating in his official announcement as new host on December 7, 2004.

Ferguson's initial contract as host ran for six years until the end of 2010; as of 2007 he mused about not renewing, but by 2008 he publicly pledged loyalty to David Letterman, saying he would sit behind him as long as he hosted.

Ferguson's contract stipulated he was to be David Letterman's successor at 11:30, but CBS passed him over for Stephen Colbert, reportedly viewing him as too niche; his contract entitled him to compensation of up to $10,000,000 if not given the position.

Chelsea Handler was reportedly in talks to take over the show, though both she and CBS denied it; John Oliver, Neil Patrick Harris, and James Corden were also reportedly approached before Corden was ultimately chosen.

The robotic skeleton sidekick Geoff Peterson was designed and built by Grant Imahara of MythBusters, who agreed to build the robot only if Ferguson could get him 100,000 Twitter followers, which Ferguson delivered.

Voice actor Josh Robert Thompson initially recorded Geoff Peterson's lines in advance, but from late June 2011 he voiced the character live in-studio for nearly every episode, including special episodes filmed in Paris and Scotland.

During a 2010 Doctor Who tribute episode with guest Matt Smith, a rehearsed dance number had to be scrapped at the last minute because CBS had not received legal clearance to use the theme song; the number later leaked on YouTube before being officially cleared and aired weeks later.

In June 2011 the show relocated to Paris for a week with Kristen Bell as co-host, temporarily renaming itself 'Le Late Late Show avec Craig Ferguson à Paris,' with Ferguson singing the theme song live accompanied by a pianist and a double bassist.

The show's March 4, 2009 episode devoted entirely to an interview with Archbishop Desmond Tutu won the 2009 Peabody Award for Excellence in Television.

On August 23, 2011, Ferguson received an envelope containing a white powder feared to be anthrax; it was later determined benign, and Ferguson joked on air that he had offered to taste it.