It has always been an important city for trade with many large and small scale industries along with the world's largest ship breaking yard, Alang which is located 50 kilometres away.

Around 1260 AD, they moved down to the Gujarat's coastal area and established three capitals: Sejakpur (now Ranpur), Umrala, and Sihor.

In 1722–1723, the forces led by Khanthaji Kadani and Maratha Pilaji Gaekwad attempted to raid Sihor but were repelled by Maharajah Bhavsinhji Gohil.

It remained a major port for almost two centuries, trading commodities with Mozambique, Zanzibar, Singapore, and the Persian Gulf.

Bhavsinhji ensured that Bhavnagar benefited from the revenue that was brought in from maritime trade, which was monopolized by Surat and Cambay.

As the castle of Surat was under the control of the Siddis of Janjira, Bhavsinhji brokered an agreement with them, giving the Sidis 1.25% of the revenue by Bhavnagar port.

Bhavsinhji's successors continued to encourage maritime trade through Bhavnagar port, recognizing its importance to the state.

The territory was further expanded by Bhavsinhji's grandson, Vakhatsinhji Gohil, when he took possession of lands belonging to Kolis and Kathis, obtained Rajula from the Navab Saheb Ahmad Khan, and merged Ghogha Taluka into the state.

This made Bhavnagar the first state that was able to construct its railway system without any aid from the central government, which was mentioned in The Imperial Gazetteer of India.

This period produced some notable reforms in the areas of administration, revenue collection, judiciary, the post and telegraph services, and economic policy.

The last ruling Maharajah of Bhavnagar, Krishnakumar Sinhji handed over the administration of his Bombay State to the people's representative in 1948.

These events were confined to an area which covered the southern part of Bhavnagar city and Tarsamiya village on the outskirts of the town.

[2]A few architectural examples include: Modern Bhavnagar comprises Takhteshvar Plots, Krishnanagar, Sardarnagar and surrounding area.

During 1935–1937, Krishnanagar area was planned and developed by late Shri Virendrabhai C. Mehta, the official town planner for the State of Bhavnagar.

Samaldas Arts College where Mahatma Gandhi studied in 1888 is one of the oldest institutions to provide higher education.

Thousands of skilled diamond-polishing workers are employed in diamond-cutting and polishing firms, whose subsidiary offices are involved in cities like Surat, Mumbai, and Antwerp.

Bhavnagar stands second in the diamond cutting and polishing industry after Surat in India, with 6,000 units operating from the district and employing more than 300,000 people.

Many aides from the state and central government helped increase the Main crops: As of 2011[update] India census,[24] Bhavnagar had a population of 593,768.

[26] Bhavnagar is well-connected to other cities of Gujarat such as Ahmedabad, Surat and Vadodara by road, with bus services operated by the state-owned transport corporation.

[29] Bhavnagar has produced many reformists, thinkers, socialists, poets, writers, artists, educationists, and independence activists.