In 1996, both Scott Hall and Kevin Nash left the WWF to sign with WCW. Hall first appeared on WCW TV live on the Memorial Day 1996 edition of Monday Nitro by interrupting a match by walking down through the crowd into the ring. He then delivered his "You Want A War?" speech, stating that he had a challenge for Eric Bischoff and any WCW superstar. As Nitro neared its end, Hall accompanied Bischoff in the broadcast booth and demand that he tell Ted Turner to pick three of his best wrestlers. The next week, Hall reappeared on Nitro five minutes before the end of the broadcast and again interrogated Bishoff. The following week on Nitro, Sting confronted and slapped Hall after Hall spit a toothpick at him and said he had a "little...no...BIG surprise" for Sting. Kevin Nash was then revealed as Hall's surprise, and the two were dubbed The Outsiders.

At The Great American Bash '96, Eric Bischoff (having the power as Executive Vice-President of WCW) invited The Outsiders to do an interview. Bischoff promised them a match at Bash at the Beach, but Hall was skeptical whether Bischoff had chosen his three WCW representatives in the match. This led to Nash powerbombing Bishoff through the interview stage, after Bishoff refused to reveal the identities of his representatives.

At Bash at the Beach, Hall and Nash appeared by themselves, without their third partner for a match scheduled originally to be Hall, Nash, and their partner against Lex Luger, Sting, and Randy Savage. Gene Okerlund asked for their partner, but with no answer as to the identity of the mystery partner, the match began. Shortly into the match, Luger was injured, requiring medical attention shortly after Sting hit Nash with a Stinger Splash in the corner while Nash was holding Luger, crushing him in the attack. Paramedics treated Luger after taking him away to the back. Sting and Savage were left to fight The Outsiders. Hulk Hogan later appeared as The Outsider's mystery partner after he attacked Savage. Hogan revealed that his turn occurred because he was tired of fans that had turned on him. Hogan called the new faction "new world order of professional wrestling," beginning a feud between wrestlers loyal to WCW and the nWo.

Soon after the nWo formed, the stable began appearing on Monday Nitro, causing mayhem and attacking WCW wrestlers. After Hulk Hogan won the WCW World Heavyweight Championship from The Giant, Hall and Nash sprayed the letters "nWo" on to the title and began to refer it on occasion as the "nWo World Heavyweight Championship. The spraying of the belt was the first step of what they referred to as "taking over" WCW.

As WCW's annual pay-per-view Fall Brawl was drawing closer, WCW was preparing their team to fight at War Games against the nWo. The nWo tricked fans into thinking that Sting was gaining entry into the nWo. At War Games, the nWo won the match controversially as two Stings fought in the match: "nWo" Sting and "Real" Sting. The real Sting was revealed as an aid to WCW, and as fans believed that the real Sting had joined the nWo, he declared that he would not help WCW in the war against the nWo.

Soon after the nWo won at Fall Brawl:War Games, they began establishing new members into the stable, including Ted DiBiase (who was "financing" the group, a counter-part to his "Million Dollar Man" gimmick in the WWF), Vincent (as "head of security"), Syxx,[4] and The Giant. Referee Nick Patrick became the group's official referee after he showed favoritism to nWo members during their matches. The nWo continued to dominate WCW, winning many matches including Hulk Hogan successfully retaining his WCW World Heavyweight Championship against "Macho Man" Randy Savage and Scott Hall and Kevin Nash winning the WCW World Tag Team Championship from Harlem Heat.

As WCW only recognized Hogan, Nash, and Hall as WCW employees due to them holding WCW titles, the other nWo members were unrecognized as WCW employees. Because of this, they were unable to wrestle other WCW wrestlers which led to the nWo starting a segment on WCW Saturday Night, called nWo Saturday Night, where nWo stable members wrestled jobbers in an empty arena.

WCW President Eric Bishoff was revealed as a member of the nWo after Roddy Piper exposed Bishoff's membership on-air. Bishoff then threatened the WCW locker room, telling them to join the nWo or be a target of the group. Soon after Bishoff's threat, many members joined the nWo including Marcus Alexander Bagwell, one of the first to join, turning on his American Males tag team partner, Scotty Riggs, and renaming himself "Buff" Bagwell. Others who joined the nWo were Scott Norton, Big Bubba Rogers, and V.K. Wallstreet. Japanese wrestler Masahiro Chono also joined the group and established himself as the leader of nWo Japan, a sister-like stable in New Japan Pro Wrestling.

On November 24, 1996, The Giant won a 60-man battle royal at World War 3, earning a title match against Hogan. On December 29 at Starrcade, Roddy Piper defeated Hulk Hogan in a non-title match. The next night on Nitro, The Giant was kicked out of the nWo when he refused to chokeslam Roddy Piper in an nWo assault.

Toward the end of the year, on an episode of Nitro, Scott Hall and Kevin Nash introduced Kyle Petty from NASCAR as an honorary member of the group, as Petty drove the nWo racing car on the Busch Series circuit. An angle was run where the Steiner Brothers vandalized the nWo car at a racetrack, kayfabe scaring off Petty and replacing him with another driver, who drove a WCW-sponsored car for the same race team.

In January, the nWo held their own Pay-Per-View event, entitled Souled Out. Hogan and The Giant fought to a no contest in the main event due to the nWo referee, Nick Patrick, being biased in the match. Nash and Hall lost their WCW Tag Titles to the Steiner Brothers at Souled Out, but were rewarded the titles the next night on Nitro after Bishoff claimed that Randy Anderson, who ran in to officiate after Nick Patrick was knocked down, was not an official referee for Souled Out.

On February 23, 1997 at Super Brawl VII, Roddy Piper wrestled Hogan in a losing effort. In the same match, Randy Savage returned and joined the nWo when he attacked Piper during the match. Eric Bischoff was then suspended by Harvey Schiller,[5] president of Turner Sports because of Bischoff abusing his power. Later, J.J. Dillon, who was (kayfabe) named WCW Commissioner, also stripped the nWo of two members, V.K Wallstreet and Big Bubba Rogers, because they were employees of WCW.

The nWo, which consisted of Hulk Hogan, Scott Hall, Randy Savage, and Kevin Nash, won a triple-threat tag team match at Uncensored against Team WCW, which consisted of Lex Luger, Scott Steiner, and The Giant (Rick Steiner was originally selected to wrestle for Team WCW but was attacked and unable to make the match), and Team Horsemen, which consisted of Chris Benoit, Steve McMichael, Jeff Jarret, and Roddy Piper. A stipulation was added that if the nWo won, they would have the privilege to challenge for any WCW title at any time or location.

At Spring Stampede, both Nick Patrick and Ted Dibiase quit the nWo after a gruesome attack on Rick Steiner by Kevin Nash. The nWo recruited The Great Muta and Hiroyoshi Tenzan several weeks after Spring Stampede, making occasional appearances, due to them being signed with NJPW.

Hogan lost the WCW World Heavyweight Championship on an episode of Nitro against Lex Luger, after he earned a title shot defeating Hogan and Dennis Rodman with his partner The Giant. However, Hogan regained the World title at Road Wild.

A War Games match was announced for Fall Brawl, after the nWo mocked The Four Horsemen by dressing as them. Team nWo defeated The Four Horsemen after Curt Hennig, who had joined The Four Horsemen a month earlier, turned on the Horsemen and joined the nWo.[8]

Rick Rude joined the nWo on an episode of Nitro on the same night he made a pre-taped appearance on RAW is WAR. He talked about how he felt sympathy for Bret Hart for the Montreal Screwjob and how he had a grudge against Sting for ending his career in a match in Japan three years earlier.

Scott Hall then won a 60 man Battle Royal at World War 3, earning a future WCW World Championship title shot.

Bret Hart made his WCW debut on the December 15, 1997 edition of Nitro. Instead of joining the nWo, however, he agreed to be the special referee in the match pitting Larry Zbyszko against the nWo's Eric Bischoff. The winner of the match would gain control of WCW Monday Nitro.

On the Monday before Starrcade, the nWo staged a complete takeover of WCW Monday Nitro. The nWo tore down the set and ran off commentators Tony Schiavone, Bobby Heenan, and Mike Tenay. They then replaced all WCW logos with the nWo logo and turned WCW Monday Nitro into nWo Monday Nitro. After a year-long battle between the nWo and WCW, it seemed as if the nWo was poised to take full control. This event was intended as a legit test run for a permanent changeover of Nitro to an nWo-centric show, with the soon-debuting Thunder becoming the WCW-centric prime-time show.[citation needed] However, due to abysmal ratings following the twenty-plus minutes of the conversion of the set on live television, the plan for an nWo weekly show was quietly dropped, with the only evidence being the occasional nWo Monday Nitro t-shirt being worn by an nWo member.

At Starrcade, Zbyszko defeated Bischoff by disqualification after Scott Hall interfered. This gave full control of Nitro to WCW. In the main event, H