BedZED was conceived in 1997 as a collaborative project between architect Bill Dunster, environmental agency Bioregional and Arup engineers, at a time when Sutton Borough Council was selling a plot of undeveloped open land for a housing development near Beddington Farmlands. Alongside developer Peabody Trust, the project partners managed to secure the land and construction began in 2001. Both Bioregional and Zedfactory still maintain their main offices onsite at BedZED.

BedZED was built using natural, recycled and reclaimed materials; all of the wood used was approved by the Forest Stewardship Council or comparable internationally recognized environmental organizations. Just over half of the construction materials (by weight) were sourced within 35 miles – considerably closer than the construction industry average. The bricks used on the outside walls came from just 20 miles away and nearly all of the steel is reused, much of it coming from refurbishment work at Brighton Railway Station.