The official establishment date of the institute is February 2, 1968; at that time, by decision of the State Committee on Science and Technology of the USSR Council of Ministers, the Institute of Physiology was established at the Academy of Sciences of the Azerbaijan SSR. However, the establishment of the institute originates from the opening in 1953 of the Department of Physiology at the Institute of Zoology of the Academy of Sciences on the initiative of one of the prominent representatives of the School of Physiology in Azerbaijan, academician Abdulla Garayev. On the basis of the department, at the Presidium of the Academy, a sector was created, which was later transformed into the leading center of the Republic, where research in the field of human and animal physiology, now acting as the Institute of Physiology, was conducted. Currently, the institute is named after its founder and first director, academician Abdulla Garayev.

     From the first days of activity at the institute, along with fundamental research aimed at solving urgent biomedical problems, research was also carried out that met the requirements of the development of agriculture in the Republic, and applied work using the country's resources:

• Studies on the effect of Naftalan oil and medicinal water on the human body, in physiological and clinical aspects, have contributed to the development and to the scientific reasonable use of the resort and balneological resources of Azerbaijan;
• Studies on the role of selenium in the receptor function of the retina, conducted jointly with the Institute of Physics of the Azerbaijan Academy of Sciences and the Research Institute of Eye Diseases, were rewarded with the State Prize of the Republic of Azerbaijan;
• "Professional Pathology of Eye Diseases" Laboratory, headed by academician Zarifa Aliyeva, developed new methods for the treatment of occupational eye diseases. In 1981, academician Zarifa Aliyeva was awarded the Averbakh Prize of the USSR Academy of Medical Sciences for research in this field.
• The Presidium of the USSR Academy of Sciences made a decision to hold the XIV Congress of the All-Union Society of Physiologists named after I.B. Pavlov in Baku, taking into account prospective studies in the field of neurophysiology and neurochemistry, conducted at the Institute.
• The ecological and physiological state of fish in various water bodies of Azerbaijan and the coastal zones of the Caspian Sea was studied and significant scientific and practical results were achieved.

     Since 2015, the Institute has developed a comprehensive biomedical research program to study the physiological and molecular genetic mechanisms of aging. This multidisciplinary program is implemented with the participation of the Azerbaijan Medical University, Baku State University and the Ministry of Health of the Republic of Azerbaijan in collaboration with the Institute of Gerontology and Bioregulation of the Academy of Medical Sciences of Russia, the Institute of Gerontology of the Academy of Medical Sciences of Ukraine and the Medical Center under the President of the Republic of Kazakhstan.

     The structure of the institute includes the departments "Aging Biology", "Ecological Physiology" and "Neurophysiology". These departments conduct research on the following issues: "Molecular genetic and physiological bases of aging", "Physiological mechanisms of impact of environmental factors on living organisms and ways of correction" and "Neurophysiological and molecular bases of integrative brain activity."