By far the best-known version was recorded by The Everly Brothers and released as a single in April 1958. It had been recorded in just two takes on March 6, 1958 and features Chet Atkins on guitar. It is the only single to be at #1 on all of Billboard's singles charts simultaneously, on June 2, 1958. It first reached #1 on the "Most played by Jockeys" and "Top 100" charts on May 19, 1958, and remained there for five and three weeks, respectively; with the August 1958 introduction of the Billboard Hot 100 chart, the song ended the year at #2. "All I Have to Do Is Dream" also hit number one on the R&B charts as well as becoming The Everly Brothers' third number one on the country chart . The Everly Brothers briefly returned to the Hot 100 in 1961 with this song.

The song has also featured on several notable lists of the best songs or singles of all time, including Q's 1001 best songs ever in 2003 and Rolling Stone's 500 Greatest Songs of All Time, where it placed 141. It was named one of the "500 Songs that Shaped Rock and Roll" by the Rock and Roll Hall of Fame and received the Grammy Hall of Fame Award in 2004.

The B-side, "Claudette", was the first major songwriting success for Roy Orbison, and was named for his wife. As a result of this song he terminated his contract with Sun Records and affiliated himself with the Everly's publisher, Acuff-Rose.

In 2010, the song was used in the trailer and the end credits of A Nightmare on Elm Street. The use of the song is ironic, because Freddy is able to kill the protagonists by entering their dreams. Also in 2010, the song was used in advertisements for the fourth season of History's Ice Road Truckers.

Jeff Bridges and Karen Allen recorded a duet of it used in the 1984 film "Starman' in which they also starred.

Another well known version was released by Richard Chamberlain on his album Richard Chamberlain Sings. This version became a hit when released as a single in 1963, peaking at #14 on the Billboard pop singles chart.

Other hit versions of the song include duets by Bobbie Gentry and Glen Campbell in 1969 (#27 U.S. pop, #6 U.S. country, #3 U.K.) and by Andy Gibb and actress Victoria Principal in 1981 (#51 U.S.).

The Nitty Gritty Dirt Band's version hit #66 on the Billboard pop chart in 1975, while Nancy Montgomery's 1981 version peaked at #85 on Billboard's country singles chart. Cliff Richard, singing with Phil Everly, took the song to #14 on the U.K. singles chart in 1994.

R.E.M. also covered this song as "(All I've Got to Do Is) Dream".