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The Portuguese Pedro Álvares Cabral landed at what is now Porto Seguro, on the southern coast of Bahia in 1500, and claimed the territory for Portugal. In 1549, Portugal established the city of Salvador, on a hill facing the Bay of All Saints. The city and surrounding captaincy served as the administrative and religious capital of Portugal's colonies in the Americas until 1763. The Dutch tried to hold control of Bahia but were defeated, only being able to seize Pernambuco. Charles Darwin visited Bahia in 1832 on his famous Voyage of The Beagle.

The state was also the last area of Brazil to join the independent confederation. Some members in the elite remained loyal to the Portuguese crown after the rest of the country was granted independence. After several battles, mostly in Pirajá, the province was finally able to expel the Portuguese on July 2, 1823, known as Bahia Independence Day, a great popular celebration. In the state there is an ongoing discussion about the exact moment of Brazilian independence, because for almost all baianos, it really happened in Bahia with the battles, and not on September 7, when the Emperor, Pedro I, declared independence.

Bahia was a center of sugar cultivation from the 16th to the 18th centuries, and contains a number of historic towns, such as Cachoeira, dating from this era. Integral to the sugar economy was the importation of a vast number of African slaves; more than 37% of all slaves taken from Africa were sent to Brazil, mostly to be processed in Bahia before being sent to work in plantations elsewhere in the country. The oldest Roman Catholic cathedral and the first medical college in the country are located in Bahia's capital, which also has one of the highest percentage of churches of any state capital in Brazil. The Catholic Archbishop of São Salvador da Bahia, Geraldo Majella Agnelo, is the Cardinal Primate of Brazil.