According to Axios, Facebook paid $400 million for the acquisition.
"By bringing Instagram and GIPHY together, we can make it easier for people to find the perfect GIFs and stickers in Stories and Direct. Both our services are big supporters of the creator and artist community, and that will continue," Vishal Shah, VP of Product Facebook, said in a statement.
Facebook used GIPHY's API for years, not just in Instagram, but in the main Facebook app, Messenger and WhatsApp.
GIPHY will continue to operate its library (including its global content collection), and the company looking forward to investing further in its technology and relationships with content and API partners.
"People will still be able to upload GIFs; developers and API partners will continue to have the same access to GIPHY's APIs; and GIPHY's creative community will still be able to create great content," Shah added.
GIPHY is a searchable library of animated GIFS that have integrated with a variety of apps, such as Slack as well as Twitter.
Facebook first attempted to acquire GIPHY in 2015, two years after it was founded.