During 1867, timber getters and co-founders of Bundaberg, John and Gavin Steuart, camped on a site later occupied by the North Bundaberg Railway Station. Thomas Watson, the first farmer arrived later in the same year. In 1868, Samuel Johnston erected a sawmill on the north bank of the Burnett River, downstream from the Steuart and Watson holdings, and timber, Bundaberg's first industry, was established.

Surveyor JC Thompson and his assistant, AD Edwards, surveyed, laid out and named Bundaberg in 1870, and by 1872 the population of the growing township and immediate district was about 200. Timber supplies soon ran short and a new industry, maize (corn) production was established, providing excellent returns for local pioneers until pests and disease devastated the industry in the late 1870s.

Experimental sugarcane growing followed and a new and exciting sugar industry grew, facilitating the development of a number of new mills. Most of these were small juice mills, extracting juice only, and the remainder were complete sugar mills; that is, extracting juice (and processing the production of juice mills) and manufacturing raw sugar. Juice was delivered to sugar mills via a fascinating network of underground pipes, and tanker-carrying barges were used on the Burnett River. The early sugar industry was supported by plantations belonging to mill owners and plantation owners and farmers employing Kanaka labour.

Local Government first came into being during 1873 with the establishment of the Bundaberg Progress Committee. In 1881, Bundaberg was gazetted a municipality and a Municipal Council was elected. Bundaberg was gazetted a town during 1902 and eventually a city in 1913. During this four-decade period Bundaberg enjoyed the establishment of newspapers and various government departments, including customs, police, courts, post and telegraph, etc. Growth in the city meant education and ecclesiastical needs were rapidly met, and a railway arrived into the region. Parliamentary representation was achieved for the people of Bundaberg, and, in the town reach of the Burnett River, a port was built, though this would later be relocated in the late 1950s to the mouth of the river. The city flourished with better health care and hospitals, and a variety of cultural and recreational activities were being enjoyed by the community.

Most labouring work available during this period was on a casual basis, chiefly farming, railway maintenance and stevedoring. Light industries including blacksmithing, coach building, boat building, and saw milling prospered. Today, this prosperity is reflected in distilling, sugar production, various equipment manufacture, engineering and allied industries, as well as fishing, light aircraft manufacture, plastics production, other major industrial enterprises, farming, food and beverage manufacture and supply and tourism.

Even though the Great Depression caused significant social and economic problems in the years between the two world wars, the Bundaberg City Council embarked on two major and progressive projects. During 1928, all city streets were sealed with bitumen, meaning Bundaberg was the first non-metropolitan Queensland town or city to use special surfacing equipment and bitumen imported specially from Trinidad.

The second project was the construction of a sewerage system. Except for one small area, the city was sewered when World War II commenced, meaning Bundaberg was now one of, if not the most, progressive town or city in Queensland. By this time, the city’s population had reached 13,000.

Bundaberg has developed a rapidly expanding tourism industry and is now marketed as the Southern Gateway to the Great Barrier Reef. In season whale-watchers enjoy the majestic movements of these ocean giants, while backpacking tourists contribute greatly to the region's economy year round.

Bundaberg has an abundance of attractive parks, gardens and sporting complexes - at last count 121. Salter Oval has a Sheffield Shield rated cricket pitch, and Kendall's Flat Junior Cricket complex is the largest and highest rated of its kind outside Brisbane. This is a city fascinated by sport and recreation, and the parks and gardens enable a great outdoor lifestyle.

Bundaberg boasts the most equable climate of any Australian town or city. In this capacity the city is ranked fifth in the world.

With the high-speed Queensland coastal tilt train service launched in November 1999, excellent air transport, bus services, an attractive Central Business District, major shopping complexes, both public & private hospitals, a progressive Regional Council, significant educational facilities from kindergarten to University, and many multi-cultural activities, the Bundaberg Region is a highly reputed location choice of young families and retired people seeking lifestyle alternatives.

Bundaberg City Council, once responsible for local government administration in the Bundaberg area, amalgamated with the Shires of Burnett, Isis and Kolan in 2008 to form Bundaberg Regional Council.