The term self-hosting was coined to refer to the use of a computer program as part of the toolchain or operating system that produces new versions of that same program—for example, a compiler that can compile its own source code. Self-hosting software is commonplace on personal computers and larger systems. Other programs that are typically self-hosting include kernels, assemblers, and shells.

The same concept also applies to energy systems. For example, the first steam engines were manufactured using hydro mechanical power (water mills), but once steam engines were used to generate the mechanical power used to manufacture other steam engines, steam power became self hosting.

If a system is so new that no software has been written for it, then software is developed on another self-hosting system and placed on a storage device that the new system can read. Development continues this way until the new system can reliably host its own development. Development of the Linux operating system, for example, was initially hosted on a Minix system. Writing new software development tools "from the metal" (that is, without using another host system) is rare and in many cases impossible.

Several programming languages are self-hosting, in the sense that a compiler for the language, written in the same language, is available. The first compiler for a new programming language can be written in another language (in rare cases, machine language) or produced using bootstrapping. Self-hosting languages include Lisp, Forth, Pascal, C, Modula-2, Oberon, Smalltalk, OCaml, FASM, Python, Scala, Haskell and BASIC.