[1] It is located on the Kudat Peninsula, about 190 kilometres (120 mi) north of Kota Kinabalu, the state capital, and is near the northernmost point of Borneo.

In the late 19th century, Franz Witti, an explorer in the employ of the British North Borneo Chartered Company, discovered oil 26 km outside the present-day Kudat town.

Company officers began clearing the land with the aid of several Brunei Malays in preparation for the declaration of Kudat as the first capital of British North Borneo.

Medhurst offered free passage to British North Borneo to any Chinese people interested in seeking employment there.

During World War II, the Japanese Imperial Army built and maintained an airfield in Kudat with the help of locals and forced labour from Java, Indonesia.

After World War II, Kudat received little attention from the rest of British North Borneo, having long been eclipsed by the rapid growth of Sandakan and Kota Kinabalu (then known as Jesselton).

[8] Locals concentrated largely on the coconut and seafood industries until the 1990s, when small numbers of visitors began coming to Kudat to experience traditional Rungus culture.

A raft of projects gave Kudat several new hotels, a sports centre, the Sidek Esplanade and a new road linking the town with the Pan-Borneo Highway.

Hakka involvement in Kudat began in the 1880s with Walter Medhurst's offer of free passage to British North Borneo to prospective migrants in southern China.

The first group of migrants to Kudat arrived in 1883 and founded the settlement of Lau San (Chinese: 老山; Pinyin: Lǎo Shān; literally 'Old Mountain').

[11] In 1889, a new batch of settlers established themselves in the new settlement of Sin San (Chinese: 新山; Pinyin: Xīn Shān; literally 'New Mountain').

The small but important tourism industry in Kudat town revolves largely around its laid back atmosphere and its proximity to the sea.

Visitors from throughout Sabah come to Kudat to purchase its fresh seafood and to experience the charms of a typical Sabahan country town.

Kudat is also notable for its proximity to Tanjung Simpang Mengayau, a headland which forms the northernmost point of the island of Borneo.

Sadly the road has not been maintained properly by the relevant authority and has caused many unfortunate accidents and is constantly being used by politician to increase the number of voters.

[15] To allow passengers to enter and exit Malaysia on this forthcoming ferry service, a Customs, Immigration, Quarantine and Security (CIQS) Centre has been constructed and other necessary facilities are currently being built.

However, in April 2016, the then-Sabahan Chief Minister Musa Aman announced that the commencement of the ferry service would be suspended indefinitely.