The cosmological constant was first proposed by Einstein as a mechanism to obtain a stable solution of the gravitational field equation that would lead to a static universe, effectively using dark energy to balance gravity. Not only was the mechanism an inelegant example of fine-tuning, it was soon realized that Einstein's static universe would actually be unstable because local inhomogeneities would ultimately lead to either the runaway expansion or contraction of the universe.
The equilibrium is unstable: if the universe expands slightly, then the expansion releases vacuum energy, which causes yet more expansion. Likewise, a universe which contracts slightly will continue contracting. These sorts of disturbances are inevitable, due to the uneven distribution of matter throughout the universe.
More importantly, observations made by Edwin Hubble showed that the universe appears to be expanding and not static at all. Einstein famously referred to his failure to predict the idea of a dynamic universe, in contrast to a static universe, as his greatest blunder. Following this realization, the cosmological constant was largely ignored as a historical curiosity.
Alan Guth proposed in the 1970s that a negative pressure field, similar in concept to dark energy, could drive cosmic inflation in the very early universe. Inflation postulates that some repulsive force, qualitatively similar to dark energy, resulted in an enormous and exponential expansion of the universe slightly after the Big Bang. Such expansion is an essential feature of most current models of the Big Bang.
However, inflation must have occurred at a much higher energy density than the dark energy we observe today and is thought to have completely ended when the universe was just a fraction of a second old. It is unclear what relation, if any, exists between dark energy and inflation. Even after inflationary models became accepted, the cosmological constant was thought to be irrelevant to the current universe.
The term "dark energy" was coined by Michael Turner in 1998. By that time, the missing mass problem of big bang nucleosynthesis and large scale structure was established, and some cosmologists had started to theorize that there was an additional component to our universe.
The first direct evidence for dark energy came from supernova observations of accelerated expansion, in Riess et al and later confirmed in Perlmutter et al. This resulted in the Lambda-CDM model, which as of 2006 is consistent with a series of increasingly rigorous cosmological observations, the latest being the 2005 Supernova Legacy Survey.
First results from the SNLS reveal that the average behavior (i.e., equation of state) of dark energy behaves like Einstein's cosmological constant to a precision of 10 per cent. Recent results from the Hubble Space Telescope Higher-Z Team indicate that dark energy has been present for at least 9 billion years and during the period preceding cosmic acceleration.