The port of Sunda Kelapa dates to the 12th century, when it served the Sundanese kingdom of Pajajaran near present-day Bogor. The first Europeans to arrive were the Portuguese, who were given the permission to erect a godown in 1522. Control was still firmly in local hands and 1527 the city was conquered by Fatahillah, who changed the name to Jayakarta. By the end of the century, however, the Dutch had pretty much taken over and the razing of a competing English fort in 1619 secured their hold on the island.

Under the name Batavia, the new Dutch town became the capital of the Dutch East Indies and was known as the Queen of the East. However, the Dutch made the mistake of attempting to replicate Holland by digging canals throughout the malarial swamps in the area, resulting in shockingly high death rates and earning the town the epithet White Man's Graveyard. In the early 1800's most canals were filled in, the town was shifted 4 kilometers inland and the Pearl of the Orient flourished once again despite a brief occupation by the British in 1806-1810.

The name Jakarta was adopted as a short form of Jayakarta when conquered by the Japanese in 1942. Since independence Jakarta's population has skyrocketed, mostly thanks to migrants coming to the city in search of wealth. The entire Jabotabek (Jakarta-Bogor-Tangerang-Bekasi) region is estimated to have 16-18 million people, a figure projected to double to 30 million by 2016.

In bureaucratese, Jakarta is frequently referred to as DKI, short for Daerah Khusus Ibukota, meaning "Special Capital Region".