Alfaxalone is a neurosteroid due to its chemical similarity to progesterone, an endogenous steroid, and because it acts in the central nervous system. In 1941, the endocrinologist Hans Selye observed the central nervous system depressing effects of progesterone in rats. By 1971, alfaxalone (a progesterone analog) in solution with a caster bean oil derivative (Cremophor EL) as a carrying agent was manufactured for humans and the veterinary industry. Due to side effects associated with the caster bean oil carrier, Glaxo voluntarily withdrew the human formulation from the market in 1984. In 1999, a new formulation replacing caster bean oil with a cyclodextrin molecule was created. By 2000-2001, it was registered and first marketed as Alfaxan® in Australia and New Zealand. Today it is has a presence and is increasingly popular in over 25 countries.

In 2018, Jurox introduced Alfaxan Multidose which has the same performance characteristics as original Alfaxan but with an added non-irritating preservative that allows the product to be used for an FDA-approved 28 days after the vial is broached.