Song historians and archaeological evidence suggest that Po-ni was heavily influenced by Hindu civilization, as transmitted by Hindu culture in Java and Sumatra, and not directly from India. The system of writing used was a Hindu script, and discovered artifacts include elephants, bulls, and yonis. There was also a heavy Chinese influence, with Chinese coins dating from as early as the seventh century being found in present-day Brunei.
The sultanate oversaw a gradual expansion of the state's influence and borders. This was accelerated with the conquest of Malacca by the Portuguese in 1511. Brunei benefited from the scattering of Muslim merchants and traders who were forced to use other ports. These merchants probably also helped to speed the conversion of the general population to Islam.
The sultanate was a thalassocracy, a realm based more on controlling trade than land. Situated in a strategic location between China and the trading networks of southeast Asia, the state served as an entrepot and collected tolls on water traffic. The society was hierarchical, with the sultan serving as despot. His powers were limited, however, by a council of princes of royal blood. One of the council's duties was to arrange for royal succession.
The reign of the fifth sultan, Bolkiah (1485-1521), is often marked as Brunei's "golden age". The sultanate's control extended over the coastal regions of modern-day Sarawak and Sabah, the Sulu archipelago, and the islands off the northwest tip of Borneo. The sultanate's influence also spread north into the Philippines, where colonies were planted in Manila Bay. The sultan also visited Java and Malacca. At the end of Bolkiah's reign, in 1521, the first Europeans visited Brunei when Ferdinand Magellan's expedition arrived at the port. Antonio Pigafetta, a navigator on the trip, described an amazing city. The Europeans rode to visit the sultan on top of "elephants, caparisoned in silk-cloth". The inhabitants of the palace "had their loins covered with gold-embroidered cloth and silk, wore poniards with golden hilts, ornamented with pearls and precious stones, and had many rings on their fingers". The visitors were fed meals on porcelain plateware.
Pigafetta described a city of 25 000 families living in wooden houses built on stilts to raise them above the water. During high tides women would ride in boats selling merchandise. The sultan's palace was surrounded by brick ramparts and protected by numerous brass and iron cannons.
This prosperous era continued through the reign of the ninth sultan, Hassan, who is credited with developing an elaborate Royal Court structure, elements of which remain today.
Relations with the Spanish were far more hostile. From 1565 on, Spanish and Brunei forces engaged in a number of naval skirmishes, and in 1571 the Spanish succeeded in capturing Manila from the Brunei aristocracy that had been established there. Brunei raised several large fleets with the intention of recapturing the city, but the campaigns, for various reasons, never launched. In 1578, the Spanish took Sulu and late in the year attacked and captured Brunei itself, after demanding that the sultan cease sending missionaries to the Philippines and, in turn, allow Christian missionaries to visit his kingdom. The invaders were forced to withdraw. The short term damage to the sultanate was minimal, as Sulu was recaptured soon after.
The long term effects of regional changes could not be avoided. After Sultan Hassan, Brunei entered a period of decline, due to internal battles over royal succession as well as the rising influences of European colonial powers in the region, that, among other things, disrupted traditional trading patterns, destroying the economic base of Brunei and many other Southeast Asian sultanates.
In 1839, the English adventurer James Brooke arrived in Borneo and helped the Sultan put down a rebellion. As a reward, he became governor and later "White Rajah" of Sarawak in northwest Borneo and gradually expanded the territory under his control. Brooke never gained control of Brunei; though he did attempt to. He asked the British to check whether or not it would be acceptable for him to claim Brunei as his own, however, they came back with bad news; although Brunei was poorly run, it had a definite sense of national identity and could therefore not be absorbed by Brooke.

In 1959, a new constitution was written declaring Brunei a self-governing state, while its foreign affairs, security, and defence remained the responsibility of the United Kingdom, now represented by a High Commissioner. An attempt in 1962 to introduce a partially elected legislative body with limited powers was abandoned after the opposition political party, Parti Rakyat Brunei, launched an armed uprising, which the government put down with the help of British forces. In the late 1950s and early 1960s, the government also resisted pressures to join neighbouring Sabah and Sarawak in the newly formed Malaysia. The Sultan eventually decided that Brunei would remain a separate state.
In 1967, Omar Ali Saifuddin abdicated in favour of his eldest son, Hassanal Bolkiah, who became the 29th ruler. The former Sultan remained as Defence Minister and assumed the royal title Seri Begawan. In 1970, the national capital, Brunei Town, was renamed Bandar Seri Begawan in his honour. The Seri Begawan died in 1986.
On January 4, 1979, Brunei and the United Kingdom signed a new treaty of friendship and cooperation. On January 1, 1984, Brunei Darussalam became a fully independent state.