The artificial island, constructed in 1634 on orders of shogun Iemitsu, originally accommodated Portuguese merchants. The Shimabara uprising of 1637, in which Christian Japanese took an active part, was crushed with the help of the Dutch. After the Portuguese and other Catholic nations were expelled from Japan in 1638, the shogunate ordered the Dutch East India Company (Vereenigde Oostindische Compagnie, VOC) to transfer its mercantile operations from the island port of Hirado to Dejima in 1641. At its maximum, the Hirado trading facility, or "factory," covered a large area. In 1637 and in 1639, stone warehouses were constructed within the ambit of this Hirado trading post. Dutch builders incorporated these very dates into the stonework, but the Tokugawa shogunate disapproved of the use of any Christian era year dates and so ordered the immediate destruction of the structures.
This modest example of Dutch failure to comply with strict sakoku practices was then used as one of the bakufu's plausible rationales for forcing the Dutch traders to abandon Hirado for the more constricting confines of Dejima island in Nagasaki harbor. However, modern research has led scholars to argue that "This was actually an excuse for the shogonate to take the Dutch trade away from the Hirado clan." This strategic decision led to significant and unanticipated consequences for Hirado, for Nagasaki, and for Japan.
As an additional punitive measure, the bakufu ordered the annual replacement of the VOC Opperhoofd or Kapitan in Japan. This, too, would lead to unanticipated consequences.
From then on, only the Chinese and the Dutch could trade with Japan. It is significant that Dejima was an artificial island, and hence not part of Japan proper. Thus, the foreigners were kept at arm's length from the sacred soil of Japan. Dejima was a small island, 120 by 75 meters, linked to the mainland by a small bridge, guarded on both sides, and with a gate on the Dutch side. It contained houses for about twenty Dutchmen, warehouses, and accommodation for Japanese government officials. The Dutch were watched by a number of Japanese officials, gatekeepers, night watchmen, and a supervisor (otona) with about fifty subordinates. There were a number of merchants for supplies and catering and about 150 tsūji ("interpreters"). They all had to be paid by the VOC. Dejima was under direct central supervision of Edo by a governor, called a bugyō, who was responsible for all contact between the VOC and all contacts with anyone in the Japanese archipelago.
Every Dutch ship that arrived in Dejima was inspected by the bugyō, and sails were seized until that ship was set to leave. Religious books and weapons were sealed and confiscated. No religious services were allowed on the island.
Despite the financial burden of the isolated outpost on Dejima, the trade with Japan was very profitable for the VOC, initially yielding profits of 50% or more. Trade declined in the 18th century, as only two ships per year were allowed to dock at Dejima. After the bankruptcy of the VOC in 1795, the Dutch government took over the settlement. Times were especially hard when the Netherlands (then called the Batavian Republic) was under French Napoleonic rule and all ties with the homeland were severed. For a while Dejima remained the only place in the world where the Dutch flag was flown.
The chief VOC official in Japan was called the Opperhoofd, or Kapitan. This descriptive title did not change when the island's trading fell under Dutch state authority. Throughout these years, the plan was to have one incumbent per year--but sometimes plans needed to be flexible.
To this was added the personal trade of individual Dutch traders in charge of Dejima, called kanbang trade, which was an important source of income for the employees and allowed the Japanese to procure books or scientific instruments. More than 10,000 foreign books on various scientific subjects were thus sold to the Japanese from the end of the 18th to the early 19th century, thus becoming the central factor of the Rangaku movement, or Dutch studies.
For two hundred years, Dutch merchants were generally not allowed to cross from Dejima to Nagasaki, and Japanese were likewise banned from entering Dejima, except for prostitutes from Nagasaki teahouses. These yūjo were handpicked from 1642 by the Japanese, often against their will. From the 18th century there were some exceptions to this rule, especially following Tokugawa Yoshimune's doctrine of promoting European practical sciences. A few Oranda-yuki ("those who stay with the Dutch") were allowed to stay for longer periods, but they had to report regularly to the Japanese guard post. European scholars such as Engelbert Kaempfer, Carl Peter Thunberg, Isaac Titsingh and Philipp Franz von Siebold were allowed to enter the mainland with the shogunate's permission. Starting in the 1700s, Dejima became known throughout Japan as a center of medicine, military science, and astronomy, and many samurai travelled there for "Dutch studies" (Rangaku).
In addition, the Opperhoofd was treated like a Japanese daimyo, which meant that he had to pay a visit of homage to the Shogun in Edo regularly (the so-called sankin kotai). In contrast to a daimyo, the Dutch delegation traveled to Edo yearly between 1660 and 1790 and once every four years thereafter. This prerogative was denied to the Chinese traders. This lengthy travel to the imperial court broke the boredom of their stay, but it was a costly affair to the Dutch. The shōgun let them know in advance and in detail which (expensive) gifts he expected, such as astrolabes, a pair of glasses, telescopes, globes, medical instruments, medical books, or exotic animals and tropical birds. In return, the Dutch delegation received some gifts from the shogun. On arrival in Edo the Opperhoofd and his retinue (usually his scribe and the factory doctor) had to wait in the Nagasakiya, their mandatory residence until they were summoned at the court. After their official audience, they were expected, according to Engelbert Kaempfer, to perform Dutch dances and songs etc. for the amusement of the shogunate. But they also used the opportunity of their stay of about two to three weeks in the capital to exchange knowledge with learned Japanese and, under escort, visit the town.
Following the forcible opening of Japan by US Navy Commodore Perry in 1854, the Bakufu suddenly increased its interactions with Dejima in an effort to build up knowledge of Western shipping methods. The Nagasaki Naval Training Center (Jp:長崎海軍伝習所/Nagasaki Kaigun Denshūsho), a naval training institute, was established in 1855 by the government of the Shogun right at the entrance of Dejima, allowing maximum interaction with Dutch naval know-how. The center was also equipped with Japan's first steamship, the Kankō Maru, given by the government of the Netherlands the same year. The future Admiral Enomoto Takeaki was one of the students of the Training Center.
Dejima today has plainly become a work in progress. The island was designated a national historical site in 1922, but further steps were slow to follow. Restoration work was started in 1953, but that project languished. In 1996, restoration of Dejima began with plans for rebuilding 25 buildings to their early 19th century state. To better display Dejima's fan-shaped form, the project anticipated rebuilding only parts of the surrounding embankment wall that had once enclosed the island. Buildings that remained from the Meiji Period were to be used.
In 2000, five buildings including the Deputy Factor's Quarters were completed and opened to the public.
In the spring of 2006, the finishing touches were put on the Chief Factor's Residence, the Japanese Officials' Office, the Head Clerk's Quarters, the No. 3 Warehouse, and the Sea Gate.
The long-term planning now anticipates that Dejima should again be surrounded by water on all four sides, which means that Dejima’s characteristic fan-shaped form and all of its embankment walls will be fully restored. This long-term plan will involve a large-scale urban redevelopment in the area. If Dejima is to be an island again, the project will require rerouting the Nakashima River and moving a part of Route 499. The project is ambitious, but the eventual completion of this restoration project will create a unique window through which Nagasaki's past can be glimpsed.