The city of Bombay originally consisted of seven islands, namely Colaba, Mazagaon, Old Woman's Island, Wadala, Mahim, Parel, and Matunga-Sion. This group of islands, which have since been joined together by a series of reclamations, formed part of the kingdom of Ashoka, the famous Emperor of India.
After his death, these islands passed into the hands of various Hindu rulers until 1343. In that year, the Mohammedans of Gujerat took possession and the Kings of that province of India ruled for the next two centuries. The only vestige (mark) of their dominion over these islands that remains today is the mosque at Mahim.
In 1534 the Portuguese, who already possessed many important trading centers on the western coast, such as Panjim, Daman, and Diu, took Bombay by force of arms from the Mohammedans. This led to the establishment of numerous churches which were constructed in areas where the majority of people were Roman Catholics. There used to be two areas in Bombay called "Portuguese Church". However, only one church with Portuguese-style facade still remains; it is the St. Andrew's church at Bandra. The Portuguese also fortified their possession by building forts at Sion, Mahim, Bandra, and Bassien which, although in disrepair, can still be seen. They named their new possession as "Bom Baia" which in Portuguese means "Good Bay".

A hundred and twenty-eight years later the islands were given to the English King Charles II in dowry on his marriage to Portuguese Princess Catherine of Braganza in 1662. In the year 1668 the islands were acquired by the English East India Company on lease from the crown for an annual sum of 10 pounds in gold; so little did the British value these islands at that time. The Company, which was operating from Surat, was in search for another deeper water port so that larger vessels could dock, and found the islands of Bombay suitable for development. The shifting of the East India Company's headquarters to Bombay in 1687 led to the eclipse of Surat as a principal trading center. The British corrupted the Portuguese name "Bom Baia" to "Bombay". The Kolis used to call the islands "Mumba" after Mumbadevi, the Hindu deity to whom a temple is dedicated at Babulnath near Chowpatty's sandy beaches.

The first Parsi to arrive in Bombay was Dorabji Nanabhoy Patel in 1640. The Parsis, originally from Iran, migrated to India about 900 years ago. This they did to save their religion, Zoroastrianism, from invading Arabs who proselytized Islam. However, in 1689-90, when a severe plague had struck down most of the Europeans, the Siddi Chief of Janjira made several attempts to re-possess the islands by force, but the son of the former, a trader named Rustomji Dorabji Patel (1667-1763), successfully warded off the attacks on behalf of the British with the help of the 'Kolis', the original fisher-folk inhabitants of these islands. The remnants of the Koli settlements can still be seen at Backbay reclamation, Mahim, Bandra, Khar, Bassien and Madh island.

Sir George Oxenden became the first British Governor of the islands, and was succeeded later by Mr. Gerald Aungier who made Bombay more populous by attracting Gujerati traders, Parsi ship-builders, and Muslim and Hindu manufacturers from the mainland. He fortified defenses by constructing the Bombay Castle (the Fort, since then vanished except for a small portion of the wall) and provided stability by constituting courts of law.