While the British East India Company initially obtained Seberang Perai (then named Province Wellesley) for agricultural purposes, Butterworth has also witnessed massive industrialisation during the latter half of the 20th century.

The Port of Penang handled 1.52 million TEUs of cargo as of 2017[update], making it one of the busiest seaports in Malaysia.

[8] A fishing village named Bagan had existed prior to the acquisition of the area by the British East India Company.

Passengers and goods were transported across the strait by sampans, and in 1894, the first cross-strait ferry service between Butterworth and George Town was introduced.

[14] After Malaya's independence in 1957, as part of an effort to advocate import substitution industries in the 1960s, the Alliance-led Penang state government, led by the then Chief Minister Wong Pow Nee, developed Mak Mandin as the first industrial estate in Penang.

[17] By the time of the relocation of the Seberang Perai Municipal Council from Butterworth to Bukit Mertajam in 2006, the town's infrastructure had deteriorated extensively.

Plans to rejuvenate parts of the town centre through the promotion of arts and culture have also been implemented through public-private partnerships.

The Mak Mandin Industrial Estate forms the heart of Butterworth's manufacturing sector and is home to a number of major local firms, including Federal Oats Mills, Fujikura Federal Cables and Zenman Industries.

[24] The former includes steel fabrication, and smaller businesses dealing with automotive parts and scrap metal.

The oldest ferry service in Malaysia commenced operations in 1894, and to this day, serves as a convenient mode of transportation across the Penang Strait for the residents of Butterworth.

As such, regular Malayan Railway services are available to other cities along western Peninsular Malaysia, including Ipoh, Kuala Lumpur, Malacca and Johor Bahru, as well as on to Woodlands in northern Singapore.

Notably, the train station is one of the main stops of the Eastern and Oriental Express service between Bangkok and Singapore as well.

In recent years, the Penang Sentral project has been underway at a site adjacent to both the Butterworth railway station and Sultan Abdul Halim Ferry Terminal.

Due to Butterworth's importance as a transportation hub, most of the Rapid Penang's routes originate and terminate within the town.

Rapid Penang's bus routes 601, 602, 603, 604, 605, 608, 701, 702, 703, 709 and 801 connect Butterworth with other towns within Seberang Perai, including Perai, Bukit Mertajam, Kepala Batas and Nibong Tebal, whilst the company's Intercity routes link Butterworth with Sungai Petani in Kedah and Parit Buntar in Perak.

[30][31][32][33][34][35][36][37][38][39][40][41][42] Cityliner operates another six bus routes which link Butterworth with a handful of destinations in Seberang Perai, Kedah and Perak.

[76][77] Built in stages between the 1970s and 2009, the temple at Jalan Raja Uda now serves as a focal point for the grand celebration of Nine Emperor Gods Festival, which occurs annually on the ninth day of the ninth lunar month in the Chinese calendar.