The codebase for the authentication server was taken from the free Fedora Directory Server project; the product is being marketed with Red Hat Enterprise Linux (RHEL). The main objective of Version 8.0 was to achieve compatibility with Red Hat's own installer, RPM, as the developers stated in their product release announcement. This means that users can rely on the standard update process available on the Red Hat Network. One of the customer references that Red Hat cites is the University of Basle, Switzerland, where the Red Hat Directory Server controls access to the university computers by some 15,000 students.

The other new features in version 8.0 include improved IPv6 support, and above all advanced security functions. For example, the password syntax rules have been revised, and the software now comes with an SE Linux profile out of the box. A module certified by the NSS (National Security Service) has also been added for FIPS (Federal Information Processing Standards) compliance. The Red Hat Directory Server 8 now supports additional platforms, running on RHEL 4 and 5, on 32 or 64 bit platforms, the 64 bit Itanium platform HP-UX 11i, and 64 bit SPARC computers with the Solaris 9 operating system.

Red Hat bought the technology for Directory Server from AOL/Netscape, publishing the sources for Netscape Directory Server in the summer of 2005. In the meantime, Fedora Directory Server has become part of a newer, more generic project known as freeIPA, which deals with identitity management, policies and auditing for Unix and Linux operating systems.