It was named after the Vrbas River and consisted mostly of territory in western Bosnia (part of historical and present-day Bosnia and Herzegovina) with its capital at Banja Luka.

Dvor district of present-day Croatia was also part of the Vrbas Banovina.

Most numerous religious groups were Eastern Orthodox Christians with 600,529 (58%), then Muslims with 250,265 (24%), and finally Roman Catholics with 172,787 (17%).

In 1939, a small portion of the Vrbas Banovina with Croat majority (Derventa and Gradačac) in the northeast was detached and made a part of the newly formed Banovina of Croatia.

In 1941, the World War II Axis Powers occupied Vrbas Banovina and the province was abolished and attached to the Independent State of Croatia.