The photographers Robert Capa, David "Chim" Seymour, Henri Cartier-Bresson, George Rodger and William Vandivert were the founding members (Vice Presidents) of Magnum in 1947, having responded with various degrees of enthusiasm to an idea of Capa's. Seymour, Cartier-Bresson and Rodger were all absent from the meeting at which it was founded. (In response to a letter telling him that he was now a member, Rodger wrote back from Cyprus to say that Magnum seemed a good idea but that "It all sounded too halcyon to be true" when Capa had told him of it and that "I rather dismissed the whole thing from my mind".) Rita Vandivert was the first President. (Magnum's own short history of itself deletes the Vandiverts from the record.) Rodger would cover Africa and the Middle East, Cartier-Bresson would cover the area east of that, Seymour and Vandivert would cover Europe and the United States respectively, and Capa would be free to go anywhere.

Magnum is one of the first photographic cooperatives, owned and administered entirely by members. The staff serve a support role for the photographers who retain all copyrights to their own work.

The Magnum cooperative has included photojournalists from across the world and has covered many historical events of the 20th century. The cooperative's archive includes photographs depicting family life, drugs, religion, war, poverty, famine, crime, government and celebrities. Magnum In Motion is the multimedia offshoot of Magnum Photos, based in New York City.

Magnum's photographers meet once a year, during the last weekend in June, in New York, Paris or London, to discuss Magnum's affairs. One day at this meeting is set aside for considering and voting on potential new members' portfolios. Successful applicants are invited to become a 'Nominee Member' of Magnum, a category of membership that presents an opportunity for Magnum and the individual to get to know each other, but where there are no binding commitments on either side.

After two years of Nominee membership, photographers then present another portfolio if they wish to apply for 'Associate Membership'. If successful, the photographer then becomes bound by all the rules of the agency, and enjoys all the facilities of its offices and worldwide representation. The only difference between an Associate Member and a full Member is that an Associate Member is not a Director of the Company and does not have voting rights in its corporate decision making. Finally, after another two years, an Associate member wishing to apply for full membership presents a further portfolio of work for consideration by the members. Once elected as a full member, this effectively confers membership of Magnum for life or for as long as the photographer chooses. No member photographer of Magnum has ever been asked to leave.

In February 2010, Magnum announced that Michael Dell's venture capital firm MSD Capital, L.P. had acquired a collection of nearly 200,000 original press prints of images taken by Magnum photographers (including, among other photographs, Afghan Girl) and had formed partnership with the Harry Ransom Center at The University of Texas at Austin to preserve, catalog, and make available to the general public. The cost of the purchase was not disclosed; however, the collection was reportedly insured for more than $100 million. A Preliminary Inventory is available for researchers who wish to use the collection.