[4][5] It was established by British Indian Government on the lines of the Royal School of Mines - London, and was formally inaugurated on 9 December 1926 by Lord Irwin, the then Viceroy of India.

[9][10] The amendment was approved by Indian Parliament and upon Presidential assent, was notified in the Gazette of India on 10 August 2016.

[15] The institute originally offered courses mainly in Mining Engineering and Applied Geology when it opened.

In 1957, the institute began offering courses in Petroleum Engineering and Applied Geophysics and the name was changed to Indian School of Mines.

From 1996 to 1997 the school came directly under the financial and administrative controls of Ministry of Human Resource Development, Government of India with pay scales and perks to its employees at par with that of Indian Institutes of Technology and Indian Institutes of Management.

[19] The Union Finance Minister Arun Jaitley, during his budget speech in Parliament on 28 February 2015, proposed to upgrade ISM Dhanbad into an IIT.

[20][21] On 25 May 2016, the Union Cabinet approved that a bill be introduced in Parliament for converting ISM Dhanbad into an IIT.

The institute has 11 hostels which are all named around some precious stones like Diamond, Sapphire, Amber, Ruby, Opal, Jasper, Aquamarine.

The campus has various places[24] where students like to spend their major portion of their time apart from taking classes in the lecture halls.

These include: Student Activity Center (SAC), Main Canteen, Ram Dhani (RD), Library Basement, Penman Auditorium, Heritage Building, Oval Garden and Ruby Park IIT (ISM) Dhanbad has the following departments[25] offering courses in various academic programs: IIT (ISM) Dhanbad offers courses[35] in engineering, pure sciences, management and humanities with a focus on engineering.

The Department of Mining Engineering has been accorded the status of "Center of Advanced Studies" by the University Grants Commission.

Admission to the MTech courses are done either through the Graduate Aptitude Test in Engineering (GATE) or through a special examination conducted by the institute.

Apart from these the institute also hosts inter-house sports and cultural competitions and technical fests of various departments.

(This placement record is till 7 February 2024) The average package this year has reached up to 13.13 lakh rupees, although there has been a slight decrease.