The name of the company is currently written with a lowercase id, which is pronounced as in "did" or "kid", and is presented by the company as a reference to the id, a psychological concept introduced by Sigmund Freud. Evidence of the reference can be found as early as Wolfenstein 3D with the statement "that's Id, as in the id, ego, and superego in the psyche" appearing in the game's documentation. Even today, id's History page makes a direct reference to Freud.

However, when working at Softdisk, the team that later founded id Software took the name "Ideas from the Deep" (a company created by John Romero and Lane Roathe in 1989), attributing themselves as the "IFD guys". Since "id" can be seen as a shortening of IFD to "ID", some have been led to believe that it can be pronounced "eye-dee". The I was later made lowercase in the release of the second Commander Keen series, eventually followed by the D. Since Wolfenstein 3D used the "id" pronunciation together with the mixed-case "iD", it can be argued that the capitalization is purely a stylistic choice.