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In the fall of 1996, Ben Karlin—who had been a writer/editor for the publication since graduating from the University of Wisconsin in 1993—moved to Los Angeles and joined other former Onion staffers to create a pilot for a news parody titled Deadline: Now for the Fox Network.

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I get the feeling that the print version is read by people hanging out in bars".Although four fake news segments anchored by Stephen Colbert were recorded, only one of the segments actually aired."If you look at the breakdown of people who read The Onion online, it's like Microsoft, Dell Computers, the Department of Justice and then, like, University of Wisconsin.The book featured mocked-up newspaper front pages from the entire 20th century, presented under the premise that the publication had been continuously in print since before 1900. Dream Works planned for the finished "Tenth Circle Added to Rapidly Growing Hell" to involve animation as well as musical singalongs.Regardless of the nearly two years of work spent on conceiving and producing Our Dumb Century, the writers only received bonuses of a few thousand dollars, despite the fact that the two-book publishing deal netted The Onion $450,000. Beginning in the fall of 2000 to early 2001, the company relocated its editorial offices from Madison, Wisconsin to a renovated warehouse in the Chelsea neighborhood of Manhattan (New York City) to raise The Onions profile, expand the publication from being simply a humor newspaper into a full production company, as well as develop editorial content in other media—including books, television and movies—and engage more directly with Internet companies as far as advertising revenue goes.In 1999, comedian Bob Odenkirk praised the publication stating, "It's the best comedy writing in the country, and it has been since it started." The Onion also runs The A. Click Hole is a satirical website from The Onion founded in 2014 that parodies clickbait websites such as Buzz Feed and Upworthy.

In 2017 the site would briefly transition to Patriot Hole, Reportedly, it was co-founder Chris Johnson's uncle—Nells Johnson—who came up with the idea to name the paper The Onion.

On January 27, 1998, MTV premiered Virtual Bill, a collaboration between writers of The Onion and 3-D character studio Protozoa.

The titular "Virtual Bill" character was a quasi-realistic CGI version of Bill Clinton created by studio Protozoa who introduced music videos and told jokes written by the staff of The Onion.

In the spring of 1996, The Onion began publishing online.

In 2007, the organization began publishing satirical news audio and video online, as the Onion News Network.

"People always ask questions about where the name The Onion came from", said former President Sean Mills in an interview with Wikinews; "and, when I recently asked (co-founder) Tim Keck, who was one of the founders, he told me...literally that his uncle said he should call it The Onion when he saw him and Chris Johnson eating an onion sandwich.