One of the oldest teams in the Euroleague BC Žalgiris (Basketball Club Žalgiris) is based in Kaunas. Since 1944, BC Žalgiris is the main Lithuanian basketball team to produce top-flight talents for European basketball, such as the Olympic champions Modestas Paulauskas, Arvydas Sabonis, Rimas Kurtinaitis, Valdemaras Chomičius, and many others.

Žalgiris became a dominant force in Soviet Union and in Europe when they added new talents to the team. First came Valdemaras Chomičius then Rimas Kurtinaitis and Vladas Garastas became the new coach. But everything changed when the team noticed a talented young kid named Arvydas Sabonis, who was 17 years old 2.09m. He debuted in the club in 1981.

In the mid-1980s, the Russian league finals between BC Žalgiris Kaunas and CSKA Moscow served as a major inspiration for the Lithuanian national revival that contributed to the emergence of the Sąjūdis national movement and re-establishment of state independence.

During the 1980s, Žalgiris was competing in the top competitions in Europe, against teams like CSKA Moscow and Cibona Zagreb. The stars Sabonis, Kurtinaitis, Chomičius and Jovaiša led the team to three consecutive Soviet Union National League championships from 1985 until 1987, beating CSKA Moscow in the finals. In the previous year, the four stars led the team to the Saporta Cup final, but lost to the champions FC Barcelona. Despite the loss, Žalgiris participated in Euroleague the next year, reaching the finals and losing against Cibona Zagreb. In 1986, Žalgiris won the William Jones Intercontinental Cup, defeating Dražen Petrović's Cibona Zagreb in the semifinals and Ferro Carril Oeste in the finals. Žalgiris was emerging as one of the top clubs in Europe at the time.

Žalgiris enjoyed the biggest success as a club during the 1997-98 and 1998-99 seasons. Led by great Lithuanian talents Saulius Štombergas, Dainius Adomaitis, Eurelijus Žukauskas, Tomas Masiulis, Mindaugas Žukauskas and experienced foreign players Franjo Arapovic and Ennis Whatley and coached by Jonas Kazlauskas, they defeted Olimpia Milano 82-67 in the Saporta Cup final in Belgrade in 1998. Saulius Štombergas scored 35 points in the final.

Zalgiris Kaunas winning the Euroleague in 1999

In the 1998-99 season they surprised all Europe. Again coached by Jonas Kazlauskas and led by former NBA players Tyus Edney, Anthony Bowie, George Zidek and great Lithuanian talent they went through the FIBA Euroleague with 18-4 record and defeted Kinder Bologna 82:74 in the final in Munich. Tyus Edney was named Euroleague Final Four MVP. Žalgiris also won the LKL and NEBL titles that same season. After these two great seasons the best players of the club went to the richest European clubs.

Sabonis became the principal owner of the club in 2003, after having played for many years in the Spanish ACB League and the NBA. He also came back to play for the club as promised for one last season in 2003-04. He again dominated the European competition winning the Euroleague regular season and Top-16 MVP. Žalgiris almost made to the Euroleague Final Four, but were stoped by Maccabi Tel Aviv when who came back in the game from an almost impossible situation.