Sarajevo was first placed on the map of academic centres in this part of Europe in 1573, with the signing of the Waqfname (Book of Endowment) by Gazi Husrev-bey. Today, Gazi Husrev-bey’s Library is, as an associate member, the oldest institution within the University of Sarajevo. Following the departure of the Ottoman administration and the arrival of Austria-Hungary, the Sharia Judicial Academy was founded in 1887, the National Museum in 1888, the Catholic Seminary of the Vrhbosna Archbishopric in 1890. The Eastern Orthodox Seminary of Sarajevo was upgraded to an institution of higher learning in 1892. Today, the National Museum is an associate member of the University of Sarajevo, and the Faculty of Catholic Theology is a full member.

The Faculty of Agriculture and Forestry was founded in 1940, and the Faculty of Medicine in 1944.

The Teacher Training College and the Institute of Biology were established in Sarajevo after the end of World War II, in the then Federative People's Republic of Yugoslavia. Following the Faculties of Medicine, Law and Agriculture and Forestry and the subsequent establishment of the Technical Faculty, in 1949 the Assembly of the People’s Republic of Bosnia and Herzegovina adopted the Law on the University, which formally established the University of Sarajevo. The Faculty of Philosophy (with a science department) and the Faculty of Veterinary Medicine became its members in 1950. Decades that followed saw a period of intense growth.

Until 1975, the University of Sarajevo was the only university in Bosnia and Herzegovina and the beacon of development of higher education and science in the country. It also contributed significantly to the establishment of the University of Banja Luka in 1975, the University of Tuzla in 1976, and the University of Mostar in 1977.

The international recognition of Bosnia and Herzegovina brought a new period and the University entered it as an association of 19 faculties, 4 academies and four schools of higher learning in Sarajevo and 2 faculties in Zenica.

During the aggression against Bosnia and Herzegovina and the siege of Sarajevo (5 April 1992 – 29 February 1996), the University suffered enormous casualties and material losses – staff suffered and was displaced, faculty members left, buildings and equipment were destroyed or badly damaged. The University continued to work and fought to preserve civilised standards in the most difficult conditions encountered by any higher education in Europe in the second half of the 20th century. The international academic community noted these efforts with admiration.

In 1996, along with other universities in Bosnia and Herzegovina, the University of Sarajevo joined the European higher education reform support programmes. This period was also marked by intense work on repairing the wartime damages and creating an environment suited for stable and continuous development. The University of Sarajevo invested all its efforts to re-enter fully the contemporary European and international academic trends.

During the period 1997–2000, the University of Sarajevo coordinated the first European-level TEMPUS project aimed at introducing the 3+2 model.

Understanding the importance of establishing itself within the European Higher Education Area (EHEA), in the academic year 2005/2006, notwithstanding the lack of any state-level guidance and the absence of any political, legal or material support, the University of Sarajevo entered the complex process of reform in compliance with the Bologna principles.

The University has developed or participated in several international third-cycle programmes of study based on the EHEA-ERA standards.

In terms of organisation, the University o Sarajevo today is a large and complex public institution, comprising 30 organisational units: 22 faculties, 3 academies, and 5 research institutes, in six areas of academic work: social science, humanities, medicine, technical studies, science, bio-technology and art. Associate members of the University include the National and University Library of BiH, Gazi Husrev-bey’s Library and the National Museum, as well as other units.

In May 2013, pursuant to the Framework Law on Higher Education in BiH and the Law on Higher Education in the Sarajevo Canton, the Senate of the University of Sarajevo adopted a new Statute and thus took a bold step forward, moving from a loose association of faculties towards a university organised in a way shaped by relevant European traditions.

At the moment, most of the facilities of full and associate members of the University are dispersed across the city of Sarajevo. The University Campus, located at the former Tito Barracks, currently houses a group of five faculties and two institutes, as well as additional student-focuses facilities. Zoning permits and designs have been prepared for part of the buildings included in the first part of the Campus Master Plan. The Master Plan was awarded the 2004 Campus Planning Award in Boston, USA.