It is one of the fishing ports of Bangladesh, and contains one of the world's longest natural sea beaches (120 kilometres (75 mi) long including mud flats).

On his way to Arakan, when the Mughal Prince Shah Shuja (1616–1660) passed through the hilly terrain of the present day Cox's Bazar, he was attracted to the scenic nature of the region.

In 1854, Cox's Bazar was made a Sub Divisional headquarter in Chittagong district under the Bengal Presidency of British India.

Captain Advocate Fazlul Karim was the first chairman after independence from the British of Cox's Bazar municipality.

This and the nearby airstrip of the Pakistan Air Force were the scene of intense shelling by the Indian Navy during the Bangladesh Liberation War in 1971.

Starting in 2017, a "mass human exodus" of the Rohingya Muslim minority group from neighboring Myanmar's Rakhine State has led to Cox's Bazar housing the "world's largest refugee settlement" over the following years.

Cox's Bazar District had a literacy rate (age 7 and over) of 71.58%, compared to the national average of 74.80%, and a sex ratio of 103.32 males per 100 females.

The local dialect is Chittagonian as well as presence of many Rohingya speakers due to the massive refugee camps.

A number of hotels, guest houses, and motels have been built in the city and coastal region and the hospitality industry is a major employer in the area.

Oysters, snails, pearls and jewelry made from shells are popular with the tourists in the seaside and city stores.