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Brunei gave the east coast of Sabah to the Sultans of Sulu in 1704 in return for favours in a succession dispute. Sabah (known as North Borneo until 1963) was visited by several western adventurers in the late 1800's.

Joseph William Torrey, an American trader, obtained from the feeble Brunei Sultanate a lease over the greater part of the territory. This lease was later transferred to Gustavus de Overbeck, an Austrian baron, and finally to Alfred Dent, an English businessman. Dent signed treaties with both the Sultans of Brunei and Sulu, gaining complete control of the territory. In 1881, he succeeded in establishing the Chartered Company of British North Borneo to manage the territory.

The region fell to the Japanese in 1941. After World War II ended in 1945, the territory was a British Crown Colony until it achieved independence by becoming part of Malaysia in 1963.

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