Prior to formal establishment as a township, a village and port called "Bilbao" (the name designated in the founding village charter of 1300) is believed to have been located near an ancient wall (circa 12th century) recently discovered by the "San Anton" Bridge.
The name of the city has unclear origins, some think it may come from "bel vado", ancient Spanish for "good river crossing" while others proclaim it stems from Basque "bi albo" meaning "two river banks."
The city grew slowly but steadily, into what is now known as the "Seven streets", after new parallel developments. In the 15th century, wars between noble families disrupted the city, which had reached a population of almost 3,000.
In 1511 the Consulate of Bilbao was granted to the city by the Spanish Crown, this allowed Bilbao to be the main export port for Merino wool from Castile to northern European cities such as Antwerp.
Bilbao became the most important commercial and financial hub of the Spanish north coast during the Spanish Empire era. The swords exported from Bilbao were known in England as "bilboes", and are mentioned by name by William Shakespeare.
The 19th century's industrial revolution was crucial for Bilbao, with the development of strong mining, steel and shipbuilding industries. At the beginning of the 20th century Bilbao was the wealthiest city in Spain, where the main banks (BBVA) and insurance companies were established.
Bilbao was besieged four times during the Carlist Wars, but due to the defenders (the regular Spanish army and local Liberal volunteers), it was never conquered, as is recorded in the city's title ("undefeated").
In 1886 the University of Deusto was established by the Company of Jesus and a major plan for the city was announced after the village of Abando was annexed. The Alzola, Achúcarro and Hoffmeyer "Ensanche" (extension) projects of 1876 almost doubled the city's area and were developed during the following decades, as happened in other cities, like Barcelona, at that time.
Bilbao sided with the Republican Government in the Spanish Civil War and was the capital of the first Basque Autonomous Government led by José Antonio Aguirre. A defensive ring, called "Cinturón de Hierro" (Iron Belt) was built around the city but despite this, on 19 June 1937 Bilbao succumbed to Franco's troops' siege (aided by the betrayal of the engineer Goicoechea, designer of the defensive ring); the bridges were destroyed to stop the enemy, but the city survived relatively intact.
During Franco's dictatorship the city's heavy industries fuelled Spain's economy and thousands of immigrants from central and southern Spain moved to Bilbao, the city and surrounding towns expanded greatly and sometimes chaotically.
In 1983 heavy floods struck the city, killing many people in the province and causing great damage to the old part of the city; the old Arriaga Theatre was devastated. Since then the "Casco Viejo" (the old district) has been renewed, along with the general trend of renewal seen all around the city.
The city has recently undergone major urban renewal, in order to move away from the region’s industrial history and instead focus on tourism and services. The developments are centered on the new metro system, designed by Sir Norman Foster and, most of all, the Guggenheim Bilbao Museum by Frank Gehry. A new tram line was introduced in 2002. The Port of Bilbao, formerly on the river, has been moved and expanded downstream on the Bay of Biscay, opening a great deal of central real estate on the river that has been the site of most of the new building. Other new landmarks include the Santiago Calatrava- designed Zubizuri Bridge and the Euskalduna Palace, a cultural centre, further downstream. The two points are linked by a new riverside passageway opposite University of Deusto, which provides an open green space for the city’s inhabitants to relax.
A major landmark tower, designed by César Pelli, to house the Iberdrola electric company is in the process of being built and there are ambitious plans to regenerate the peninsula on the river known as Zorrozaurre.
In 2010, Bilbao City Hall topped 78 nominations to clinch the inaugural Lee Kuan Yew World City Prize