The neighborhood is centered on a valley opening to the Bosphorus and is somewhat isolated from the main part of the city, being surrounded by nature preserves, cemeteries, and a military installation.

Kuzguncuk is bordered on the north by Beylerbeyi, on the east by Burhaniye, on the south by İcadiye and Sultantepe, and on the west by the Bosphorus.

[4] During Byzantine times, this area may have been called Khrysokeramos (Hrisokeramos), meaning "golden tile", because of a church here with a gilded roof.

[6] Jews, who were expelled from Spain and Portugal and accepted into the Ottoman Empire in the late 15th century were among the settlers in the neighbourhood.

As voluntary immigrants, they had more freedom concerning their place of residence, and many left the traditional Jewish quarters of Istanbul such as Balat for villages along the Bosphorus such as Kuzguncuk.

The pogrom of 1955 caused the emigration of many members of Istanbul's minority groups, including Kuzguncuk's Greeks and Armenians.