Bundaberg as a European township was founded by timber getters John and Gavin Steuart and Lachlan Tripp in 1867. The first farmers in the area arrived soon after. Timber was the first established industry in Bundaberg. In 1868 a sawmill was erected on the Burnett River downstream from the Steuart and Watson holdings. The city was surveyed, laid out and named Bundaberg in 1870.

Experimental sugar cane growing in the district followed and a successful industry grew. The first sugar mill was opened in 1882. The early sugar industry in Bundaberg was the result of the semi-slave labour carried out by Kanaka. Bundaberg was gazetted a town in 1902 and a city in 1913. The main street is called Bourbong Street — the result of a typographical error by the local daily paper, the News-Mail. The street had originally been named Bourbon Street.

Tourism

Tourism is an important industry to Queensland and Bundaberg is known as the 'Gateway to the Great Barrier Reef'. The city lies near the southern end of the reef in proximity to Lady Elliot and Lady Musgrave Islands. The world famous Mon Repos turtle rookery is located on the coast just east of Bundaberg, as is the town of Bargara, an increasingly popular holiday and retirement destination.

The northern bank of the Burnett River between the Don Tallon and Burnett bridges is home to a colony of flying foxes. The bats leave the river at dusk and fan out all over the city to look for food.

Tours of the famous Bundaberg Rum distillery are also popular with tourists. The Mystery Craters — mysterious water filled holes in the ground at South Kolan are also a tourist attraction.

Nearby beaches are popular with both locals and tourists. Moore Park, to the city's north, boasts 20 km of golden sandy beach. Beaches on the southern side of the Burnett River are (from north to south) The Oaks Beach, Mon Repos, Nielsen Park, Bargara Beach, Kellys Beach, Innes Park and Elliott Heads. Mon Repos attracts tourists. Kellys Beach is popular with families, particularly in summer months.