The land it occupies is relatively green, surrounded by Mediterranean scrub, chestnut groves, and maritime pines; however, the entire area has recently been used as an industrial zone, mainly for floriculture.

Bussana was founded in Roman times, and originally named Armedina or Armedana; it was only in the 7th century, however, that the first evidence of stable settlements appeared.

Starting from the 15th century, a building boom began in the town, accompanied by a strong demographic increase; in 1404, the first church was completed, built on the remains of a previous one, and dedicated to Saint Giles.

The population was predominantly rural, subsisting on agriculture, cultivation of olives and citrus fruits, and small-scale animal husbandry.

[1] The worst of the damage in Bussana occurred at 6:21 on that Ash Wednesday morning, as a seismic wave lasting 20 seconds caused immediate destruction and deaths throughout the village.

In 1889, the cornerstone of the town of Bussana Nuova was laid, and in 1894 the Bussanesi abandoned the original village, celebrating their last Mass on Palm Sunday.

The settlement had no electricity, tap water, or sanitation, but the new community of inhabitants grew from the small original nucleus to around 20–30 people by 1968, mostly hippie artists coming from all over Europe (Italy, Austria, England, France, Denmark, Germany, and Sweden).

When the police forces arrived, they were faced with the villagers behind barricades refusing to leave and by a large group of international news reporters.

The artists and craftsmen, who live and work in Bussana Vecchia, have turned it into what it is today: an oasis of creativity, a unique and special place in the world.

The development of the village now also involved the Municipality of Sanremo, which in 1982 announced an international competition to decide on the restructuring to be implemented at the site.

In December 2017, the Italian Department of State Property (Demanio) sent tax settlements of tens of thousands of Euros to all the inhabitants and termed them "occupiers".

[2] The Italian Department of State Property is planning to transfer full responsibility for Bussana Vecchia to the City of Sanremo starting in 2018.

In March 2019, the M5S (Five Star Movement) political party threatened to begin evicting all residents of Bussana Vecchia unless the Municipality of Sanremo comes up with a plan for long-overdue repairs and maintenance by the end of April 2019, citing issues of safety for residents of the village, and in the interests of safeguarding the former ghost town for its unique tourist attractions.

With the growth of interest in floriculture at the end of the 19th century, this possibility was beginning to be explored, and was then carried on by the inhabitants of Bussana Nuova.