It was founded by Malkoçoğlu İbrahim Bey in 1572 and was known as "Aşağı Vakıf" ("lower waqf", i.e. Islamic endowment in Turkish).

From April 1993 to 14 September 1995 the town's name was Srbobran (as it was occupied by Serb paramilitary forces).

During that time the majority of Bosniaks were exiled to the neighboring town of Bugojno, and on 14 September 1995 Donji Vakuf was liberated by the Bosnian Army.

Bosniaks make a pilgrimage to the nearby holy site of Ajvatovica in June.

Donji Vakuf is twinned with: Una-Sana  Central Bosnia Posavina  Herzegovina-Neretva Tuzla  West Herzegovina Zenica-Doboj  Sarajevo Bosnian Podrinje Canton 10