[1] The Agency was formed in 1818 at the conclusion of the Third Anglo-Maratha War,[2] and covered the princely states of Bhopal (largest and eponymous), Khilchipur, Kurwai, Narsingarh, Muhammadgarh, Pathari and Rajgarh surrounding Bhopal, as well as the districts of Bhilsa and Isagarh, which belonged to the Gwalior State and also the district of Sironj, which belonged to Tonk State in Rajputana.

The head of the Agency was appointed by the British Governor-General of India.

Bhopal Agency ceased to exist at the stroke of midnight on 15 August 1947 when British India became independent, and all treaty relations between the princely states and the British ceased to exist.

After the departure of the British, the rulers of these states all acceded to the Dominion of India, and all but Bhopal were incorporated into the new state of Madhya Bharat, while Bhopal became a Chief Commissioner's Province.

Until 1931 the agency included nine princely states, as well as a number of estates ruled by Thakurs and other minor territories.