According to one story of the creation of Chanel No. 5, Coco Chanel commissioned the renowned perfumer Ernest Beaux to make six perfumes for her choosing. They were labelled No. 1, No. 2, etc. through No. 6. (Breaux himself, q.v., relates a slightly different version of the story). It was bottle No. 5 that was to Chanel's liking and became the chosen formula. The number "5" was also her lucky number.
At the time of its inception, the most expensive perfume oil was jasmine due to the expensive distilling process. Chanel wanted to create the most costly perfume in the world, and as such No. 5 relies heavily on jasmine.
Chanel introduced it first to some of her friends on May 5, 1921. Initially, it was given to preferred clients for free at her boutique. The fitting rooms in her boutique were also scented with No. 5. This strategy is practiced today by retailer Abercrombie & Fitch with their own signature perfumes and colognes.
In 1924, Pierre Wertheimer partnered Coco Chanel in her perfume business. He owned 70%, Coco owned 10%, and her friend Bader owned 20%. Chanel agreed to owning such a small amount in exchange for having complete control over the product. Today, the Wertheimer family still runs the perfume business.
"I want to give women an artificial perfume," said Chanel. "Yes, I really do mean artificial, like a dress, something that has been made. I don't want any rose or lily of the valley, I want a perfume that is a composition."  No. 5 is famous for being the first perfume to heavily rely on synthetic floral aldehydes as a top note. Before synthetics, perfume either had to be applied very heavily or frequently so that the fragrance would last.
"A woman who doesn't wear perfume has no future"
Chanel applied the French aesthetic theory that "ugly" placed next to "beautiful", by contrast, makes the beautiful object appear more so. In this era almost all perfumes were floral and "pretty" - designed to enhance a woman's beauty with more beauty. Instead of the scent of flowers, Coco wanted a perfume that "reflects my personality, something abstract and unique". She thought that a perfume should serve to spotlight a woman's natural beauty using contrast - i.e. the artificial perfume would make the woman's natural beauty more evident.
Chanel No. 5 is classified as a floral-aldehyde. Its top notes include ylang ylang, neroli and aldehydes; its mid notes May rose and jasmine; and its base notes sandalwood, vetiver and vanilla.
In the UK, Chanel No. 5 was originally available in three strengths: Pure Perfume, Eau de Toilette and Eau de Cologne. The Eau de Cologne was discontinued in the 1990s, and an Eau de Parfum introduced.