The history of modern Kota Kinabalu begins in the late 19th century, although these lands had been under the influence of the Bruneian Empire since the 15th century. Originally, a fishing village named Api-Api was located here. In 1899, the British North Borneo Company (BNBC), having lost its base on Gaya Island, established a new administrative centre here. The settlement was renamed Jesselton in honour of Sir Charles Jessel, the Vice-Chairman of the company.
Several factors played a key role in the city's formation. Firstly, its strategic location: the natural deep-water harbour was sheltered from winds and was ideal for a port. Secondly, its proximity to the North Borneo Railway under construction, which connected the coast with the interior regions, facilitated trade development. Under the administration of the British company, Jesselton quickly transformed into a vital trading hub.
From the very beginning, the city's economy was export-oriented. Jesselton became a centre for the trade of rubber, rattan, honey, and wax, which were delivered from the island's interior. After the Second World War, during which the city was almost completely destroyed, it was rebuilt and in 1946 became the capital of the British Crown Colony of North Borneo, replacing Sandakan in this status. In 1968, now part of independent Malaysia, Jesselton was renamed Kota Kinabalu in honour of the majestic Mount Kinabalu located nearby.