The idea of establishing a university of Brunei Darussalam was first raised during a comprehensive review of the country's higher education facilities in 1976. Subsequent discussions led to the appointment of a steering committee which, with the assistance of the British Council, proceeded to engage a group of experts to study and advise on the matter. However, active planning for a university did not commence until 1984-5, at which time academic links were discussed with a number of universities in the United Kingdom and Malaysia.

On 23 April 1985 came an announcement from His Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah, Sultan and Yang Di-Pertuan of Negara Brunei Darussalam that, in the interest of national development, Brunei Darussalam was to have its own university and that the necessary arrangements should be made with minimum delay.

In a remarkably short period of time a temporary campus was set up in a renovated building complex close to the Institute of Education, four and a half kilometres from the city centre.

With the help of several overseas universities and under the supervision of a Ministry of Education Committee on the Establishment of the University, the first degree programmes and courses were devised. Formal academic links were established with University College, Cardiff, and with the University of Leeds and both of these universities helped in the development of the English-medium programmes. For Malay-medium programmes, assistance was provided by Universiti Sains Malaysia and Universiti Kebangsaan Malaysia.

Academic staff were recruited in the United Kingdom, Malaysia and Singapore, and some were also seconded from universities in these countries.

On 28 October 1985, just six months after His Majesty's announcement, Universiti Brunei Darussalam opened its doors to the first intake of 176 students. In 1988, the Sultan Hassanal Bolkiah Institute of Education was integrated with the University.

Today the University accommodates more than 300 academic staff and 2,800 students in seven faculties, namely Arts and Social Sciences, Business, Economics and Policies Studies, Sultan Haji Omar Ali Saifuddien Institute of Islamic Studies, Science, Sultan Hassanal Bolkiah Institute of Education, Academy of Brunei Studies and Institute of Medicine.