It was established by Rao Hamirji in 1510 and was made the state capital by Rao Khengarji I in 1549. Its foundation stone as state capital laid formally on Vikram Samvat 1604 Maagha 5th (Approx. 25 January 1548). Currently it is the district headquarters of Kachchh District, the second largest district in India. Bhuj is home to one of the first Swaminarayan Sampraday temples, built in 1822.
In January 2001, the city was struck by a major earthquake which caused a great deal of damage and loss of life.