Like other places of Bangladesh Sitakunda, widely known to be a gateway of country’s largest commercial hub Chittagong, has a strong historical background which highlights the blessings of nature with scenic beauty, favoring huge potentialities of this region for trade and commerce. In fact, Sitakunda is one of the oldest sites of human habituation in Bangladesh. It is also the home of the country’s first eco-park, as well as alternative energy projects, specially wind energy and geothermal power. The legends of the area state the sage Bhargava created a pond ( Kunda ) for Sita Devi to bathe in when her husband Lord Ramchandra visited during his exile in the forests. Sitakunda derived its name from this incident.

Sitakunda was almost ruled alternatively by various Buddhist rulers of Myanmar in the east and Muslims rulers of Bengal in the west. The eastern rulers originated from the Kingdom of Arakan, the Mrauk U dynasty, Arakanese pirates and the Pagan Kingdom. The western rulers came from the Sultanate of Bengal and Mughal state of Suba Bangala. European rule of Sitakunda was heralded by Portuguese privateers in 16th and 17th centuries, who ruled together with the pirates, and the British Raj in 18th and 19th centuries, who unified Sitakunda into the rest of the Chittagong District.

During the 6th and 7th centuries CE, the Chittagong region was ruled by the Kingdom of Arakan. In the next century, it was briefly ruled by Dharmapala of the Pala Empire. The area was conquered in 1340 by Sultan Fakhruddin Mubarak Shah of Sonargaon, who founded the first dynasty of the Sultanate of Bengal. When Sultan Ghiyasuddin Mahmud Shah of the last dynasty of the Sultanate of Bengal was defeated in 1538 by Sher Shah Suri of the Sur Dynasty, the Arakanese captured the region again. Batsauphyu ( reign: 1459-1482 ) of the Mrauk U dynasty took advantage of the weakness of Sultan Barbak Shah of Bengal to lead the invasion. In this period, Keyakchu ( or Chandrajyoti ), a prince of Arakan, established a monastery in Sitakunda.

Along with the rest of Bengal, Sitakunda came under the rule of the British East India Company after the company’s defeat of the Nawab of Bengal at the Battle of Plassey in 1757. Rapid growth in the Bengali population since then resulted in an exodus of non-Bengali people from Sitakunda and its vicinity to the Chittagong Hill Tracts. During the Ardhodaya Yog movement, a part of the Swadeshi Indian independence movement, the governance of Sitakunda was briefly in the hands of Indian nationalists when, in February 1908, they took over the central government in Kolkata. In 1910, Indian Petroleum Prospecting Company drilled here for hydrocarbon exploration, the first such activity in East Bengal. In 1914, the first onshore wildcat well in Bangladesh was drilled at Sitakunda anticline to a depth of 762 metres ( 2,500 ft ).

After the Indian Rebellion of 1857, the British colonial government ( British Raj ) replaced the governance of the East India Company. When the British withdrew in 1947, after creating the independent states of India and Pakistan, Sitakunda became a part of East Pakistan. The first potential for a ship breaking industry appeared in 1964 when Chittagong Steel House started scrapping MD Alpince, a 20,000 metric tons Greek ship that had been accidentally beached near Fouzdarhat by a tidal bore four years earlier. During the Bangladesh Liberation War of 1971, Sitakunda was part of Sector 2. The ship breaking industry began in earnest in 1974 when Karnafully Metal Works started scrapping Al Abbas, a Pakistani ship damaged in 1971. The industry flourished in the 1980s. As of 2007, Sitakunda had overtaken the ship breaking industries of India and Pakistan to become the largest in the world.