As per Article 320 of the Constitution, the examinations for recruitment to all posts and services of the Central Government are required to be conducted by the UPSC. The Estimates Committee of the Parliament, in its 47th Report (1967-68), recommended the setting up of a Service Selection Commission for taking over and conducting examinations for recruitment to lower categories of posts from UPSC.

Pursuant to this, and as an interim measure, an examination wing was initially added to the Secretariat Training School, subsequently renamed as the Institute of Secretariat Training and Management (ISTM).

The Administrative Reforms Commission (ARC), in its Report on Personnel Administration, drew attention to the fact that bulk of the staff of the Government at the Centre and in the States belonged to Class III and Class IV categories. Referring in particular to the identical nature of qualifications stipulated for entry into such posts in various offices, the Commission advocated pooling of the requirements of non-technical posts by different Departments and selection of personnel either by joint recruitment or through a recruitment board. It was in pursuance of this recommendation that the Government of India decided to constitute a Subordinate Services Commission under an executive resolution.

The Government of India, in the Department of Personnel and Administrative Reforms on 4 November, 1975 constituted a Commission called the Subordinate Services Commission which has subsequently been re-designated as Staff Selection Commission effective from the 26 September, 1977 to make recruitment to various Class III (now Group 'C') (non-technical) posts in the various Ministries and Departments of the Government of India and in Subordinate Offices.

The functions of the Staff Selection Commission have been enlarged from time to time. From May 1999, the Commission was entrusted recruitment to all Group 'B' posts (non-gazetted) in pay scales the maximum of which was less than Rs.9300-34800 (Grade Pay Rs.4600) earlier done by the Union Public Service Commission. From November 2003, the Central Government further authorized the Commission to make recruitment of all Group 'B' non-gazetted posts.