Brunei was trading with China during the 6th century, and, through allegiance to the Javanese Majapahit kingdom (13th to 15th century), it came under Hindu influence. In the early 15th century, with the decline of the Majapahit kingdom and widespread conversion to Islam, Brunei became an independent sultanate. It was a powerful state from the 16th to the 19th century, ruling over the northern part of Borneo and adjacent island chains. But it fell into decay and lost Sarawak in 1841, becoming a British protectorate in 1888 and a British dependency in 1905. Japan occupied Brunei during World War II; it was liberated by Australia in 1945.

The sultan regained control over internal affairs in 1959, but Britain retained responsibility for the state's defense and foreign affairs until 1984, when the sultanate became fully independent. Sultan Bolkiah was crowned in 1967 at the age of 22, succeeding his father, Sir Omar Ali Saifuddin, who had abdicated. During his reign, exploitation of the rich Seria oilfield had made the sultanate wealthy. Brunei has one of the highest per capita incomes in Asia, and the sultan is believed to be one of the richest men in the world. In Aug. 1998, Oxford-educated Prince Al-Muhtadee Billah was inaugurated as heir to the 500-year-old monarchy.

Sultan Bolkiah began taking cautious steps toward democratic reform in Sept. 2004, when he reinstated parliament for the first time since Brunei gained independence in 1984. He was widely praised in May 2005 when he fired four members of his cabinet, including the education minister, whose plan to expand religious education angered many parents.