During the first meeting of the Nederlandsch-Indische Sterrekundige Vereeniging (Dutch-Indies Astronomical Society) in the 1920s, it was agreed that an observatory was needed to study astronomy in the Dutch East Indies.

Of all locations in the Indonesia archipelago, a tea plantation in Malabar, a few kilometers north of Bandung in West Java was selected.

The observatory is named after the tea plantation owner Karel Albert Rudolf Bosscha, son of the physicist Johannes Bosscha and a major force in the development of science and technology in the Dutch East Indies, who granted six hectares of his property for the new observatory.

On 17 October 1951, the Dutch-Indies Astronomical Society handed over operation of the observatory to the government of Indonesia.

In 1959 the observatory's operation was given to the Institut Teknologi Bandung and has been an integral part of the research and formal education of astronomy in Indonesia.