The town consists of the Katastralgemeinden Ahorn, Bad Ischl, Haiden, Jainzen, Kaltenbach, Lauffen, Lindau, Pfandl, Perneck, Reiterndorf and Rettenbach.

Humans have lived in the Bad Ischl area since the time of the pre-historic Hallstatt culture; documentary evidence of the settlement dates from a 1262 deed, it which it appears as Iselen.

In 1419 Archduke Albert V of Austria established the local seat of the Salt Chamber (Salzkammer [de]) at Wildenstein Castle, and Ischl was granted the privileges of a market town in 1466 by Emperor Frederick III.

When in the early part of the 19th century brine became medically popular in Continental Europe, Ischl soon turned into a fashionable spa resort – notable guests included Prince Klemens Wenzel von Metternich (1773–1859), Archduke Rudolf of Austria (1788–1831) and Archduke Franz Karl of Austria (1802–1878).

Approximately 15% of the city's population was foreign born in 2019.Besides the Kaiservilla, the city offers several health spas and tourist attractions, like the historic Kongresshaus opened in 1875, the new Kurhaus built by Clemens Holzmeister in 1932, as well as the Lehár Villa, the former residence of Franz Lehár, that he acquired in 1912 and today serves as a museum.

A gondola lift runs from the town up to the Katrin alpine pasture at 1415 m (4643 ft), which offers a panoramic view of the Salzkammergut mountains.