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Bags were lost, and there were waits of over five to seven hours. The aerobridge and bay allocation systems broke down, with queues building up throughout the airport and the baggage handling breaking down. The inauguration of the airport was marked with numerous problems. The first domestic departure was Malaysia Airlines flight MH1432 to Langkawi at 07:20 MST the first international departure was Malaysia Airlines flight MH84 to Beijing at 09:00 MST. The first international arrival was Malaysia Airlines flight MH188 from Malé at 07:30 MST. The first domestic arrival was Malaysia Airlines flight MH1263 from Kuantan at 07:10 MST. Kuala Lumpur International Airport was officially inaugurated by the tenth Yang di-Pertuan Agong, Tuanku Ja'afar of Negeri Sembilan, on 27 June 1998 at 20:30 MST. Phase Three is anticipated to increase capacity to 100 million passengers per year. Phase Two, designed to increase capacity to 35 million passengers per year is largely complete.

The Phase One airport had sixty contact piers, twenty remote parking bays with eighty aircraft parking positions, four maintenance hangars and fire stations.

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Phase One involved the construction of the main terminal and one satellite terminal, giving a capacity of 25 million passengers, and two full service runways. An ambitious three-phase development plan anticipates KLIA to have three runways and two terminals each with two satellite terminals. The airport's site spans 100 square kilometres (39 sq mi) 2, of former agricultural land and is one of the world's largest airport sites.

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The IATA airport code KUL was transferred from Subang Airport, which currently handles only turboprop aircraft, general aviation and military aircraft. Malaysia Airports agreed to redevelop the remaining Terminal 3 to create a specialist airport for turboprop and charter planes surrounded by a residential area and a business park. Upon KLIA's completion, Subang Airport's Terminal 1 building was demolished. The chief architect who designed the new airport terminal was the Japanese architect Kisho Kurokawa. It was created as part of the Multimedia Super Corridor, a grand development plan for Malaysia. The construction of the airport was done mainly by a few state owned construction companies as well as Ekovest Berhad – helmed by Tan Sri Datuk Lim Kang Hoo. The ground breaking ceremony for Kuala Lumpur International Airport (KLIA) took place on 1 June 1993 when the government under Mahathir Mohamad decided that the existing Kuala Lumpur airport, then known as Subang International Airport (now Sultan Abdul Aziz Shah Airport) could not handle future demand. The airport is operated by Malaysia Airports (MAHB) Sepang Sdn Bhd and is the major hub of Malaysia Airlines, MASkargo, Batik Air Malaysia, UPS Airlines and World Cargo Airlines, and the major operating base of AirAsia, AirAsia X and MYAirline. It is the world's 23rd-busiest airport by total passenger traffic. KLIA is the largest and busiest airport in Malaysia. It is located in the Sepang District of Selangor, approximately 45 kilometres (28 mi) south of Kuala Lumpur and serves the city's greater conurbation. Kuala Lumpur International Airport ( KLIA) ( IATA: KUL, ICAO: WMKK) is Malaysia's main international airport.