In 1904, a few members of staff in the Post Office's Engineering Department were relieved of their administrative duties so that they could pursue research in a room set aside for them in the Central Telegraph Office in London. In 1909, the "Research Section" was recognised as a separate entity and was allocated more laboratories in a building nearby. In 1921, activities moved to accommodation at Dollis Hill in London, initially in ex-army huts before moving into permanent accommodation on the site in 1933.

During the 1920s, work focused on the application of electronic techniques to telephony including development of valve amplifiers to enable long distance calls. In the Second World War, the Colossus computer used in code-breaking at Bletchley Park was built at the Research Station. Following the Second World War, the Station developed electronic switching for telephone exchanges and worked on pulse-code modulation (PCM) which led to their installation of the first PCM exchange in the world in 1968.

In the late 1960s, the Post Office acquired part of the decommissioned Martlesham airfield and, in 1975, the Research Station was officially moved to this site. While at this site, the Research Station became part of the BT Group and it still continues today as BT Research based at the site in Martlesham Heath, Suffolk. The site is now called Adastral Park and BT Research is currently investigating IT services, big data, the future of the internet, security systems and digital homes. It remains one of the world's leading centres of telecoms innovation.