Although Baía de Todos os Santos (Todos os Santos Bay) was first encountered by Europeans and christened in 1502, the city of Salvador wasn't founded until 1549 by a fleet of Portuguese settlers headed by Tomé de Sousa, the first Governor-General of Brazil. It quickly became Brazil's main sea port and the first colonial capital of Portuguese Brazil, a center of the sugar industry and the slave trade. The city became the seat of the first Catholic bishop of Brazil in 1552, and is still an ecclesiastical power center of Brazilian Catholicism. Its cathedral, still standing today, was completed in 1572. By 1583, there were 1,600 people residing in the city, and it quickly grew into one of the largest cities in the New World, surpassing any colonial American city at the time of the American Revolution in 1776.

Salvador was the capital city of the Portuguese viceroyalty of Grão-Pará and its province of Bahia de Todos os Santos. The Netherlands captured and sacked the city in May of 1624, and held it along with other NE ports until it was re-taken by the Portuguese in April of the following year.

Salvador was the first capital of Brazil and remained so until 1763, when it was succeeded by Rio de Janeiro, the new economic power center of that era. The city became a base for the Brazilian independence movement and was attacked by Portuguese troops in 1812, before being officially liberated on July 2, 1823. It settled into graceful decline over the next 150 years, out of the mainstream of Brazilian industrialization. It remains, however, a national cultural and tourist center.

By 1948 the city had some 340,000 people, and was already Brazil's fourth largest city. By 1991 the population was 2.08 million.