The earliest mention of the island of Abadan, if not the port itself, is found in the works of the Greek geographer Marcian, who renders the name "Apphadana".

An etymology for this name is presented by B. Farahvashi to be derived from the Persian word "ab" (water) and the root "pā" (guard, watch) thus "coastguard station").

[7] In Islamic times, a pseudo-etymology was produced by the historian Ahmad ibn Yahya al-Baladhuri (d. 892), quoting a folk story that the town was presumably founded by one "Abbad bin Hosayn" from the Arabian Tribe of Banu Tamim, who established a garrison there during the governorship of Hajjaj in the Ummayad period.

[5] The siltation of the river delta forced the town further away from water; In the 14th century, however, Ibn Battutah described Abadan just as a small port in a flat salty plain.

On 16 July 1909, after secret negotiation with the British consul, Percy Cox, assisted by Arnold Wilson, and Sheik Khaz'al agreed to a rental agreement for the island, including Abadan.

During World War II, Abadan was the site of brief combat between Iranian forces and British and Indian troops during the Anglo-Soviet invasion of Iran.

Rioting broke out in Abadan, after the government had decided to nationalise the oil facilities, and three British workers were killed.

[20] It was not until 1954, after the British-American led coup they overthrew the democratically elected government, that a settlement was reached, which allowed a consortium of international oil companies to manage the production and refining on the island.

[15] After the total nationalisation, Iran focused on supplying oil domestically and built a pipeline from Abadan to Tehran.

On 19 August 1978, the anniversary of the US-backed coup d'état that had overthrown the nationalist and popular Iranian prime minister, Mohammed Mossadegh, the Cinema Rex, a movie theatre in Abadan, was set ablaze.

The Cinema Rex Fire caused 430 deaths,[22][nb 2] but more importantly, it was another event that kept the Islamic Revolution moving ahead.

Over time, the true culprits, radical Islamists, were apprehended, and the logic behind this act was revealed, as they were trying both to foment the general public to distrust the government even more, and perceived cinema as a link to the Americans.

After the war, the biggest concern was the rebuilding of Abadan's oil refinery, as it was operating at 10% of capacity due to damage.

Recently, Abadan has been the site of major labour activity as workers at the oil refineries in the city have staged walkouts and strikes to protest non-payment of wages and the political situation in the country.

Abadan is notably one of the few hottest populated places on earth and experiences a few sand and dust storms per year.

The Abadan Refinery construction project started in 1909 and its operation began in 1962 by a production capacity of 2500 barrels per day.

[49] There is a large amount of external investment from East Asian countries that are building oil refineries and developing a lot of real estate.

Today, Abadan is known for its lively fish market where locals buy fresh catch of the day used in the many delicious seafood dishes of the city.