EPS was founded in 1989 as Economists Against the Arms Race (ECAAR) in New York by Mr Robert Schwarz. Since then, many renowned economists, including nobel laureates, joined the Board of Trustees: Jan Tinbergen, Wassily Leontief, Franco Modigliani, James Tobin, Kenneth Arrow, and Lawrence R. Klein, Oscar Arias, Amartya Sen, Robert Solow, and Douglass North Joseph Stiglitz, George Akerlof, William Sharpe, and Daniel McFadden.

In 1993, following the end of the US-Soviet arms race, ECAAR became Economists Allied for Arms Reduction. The organization continued its interest in nuclear issues, working especially to analyze the costs of nuclear waste disposal, to support the Nuclear Non-Proliferation Treaty, and to expand its own network through the addition of affiliates around the world.

ECAAR received its NGO certification to two UN bodies, the Economic and Social Council and the Department of Public Information, in 1995. ECAAR became EPS in January 2005. The new name was chosen to reflect the full range of concerns of its members and program, and the increasingly complex interrelationships among disarmament, development, security, conflict, war and peace.