There is architectural evidence that Bhutan was inhabited as early as 2000 BC. In the 2 nd century, Buddhism was believed to be introduced to the area. At the end of the the 8 th century, the important figure, Guru Rinpoche, who was an Indian saint, traveled through Bhutan. He is remembered as the second Buddha, since he was able to suppress demons and evil spirits.

In the 16 th century, there were various groups and clans who ruled sections of the land in Bhutan. In 1615, however, another monk of the Drukpa Kagyu school of Buddhism in Tibet, Ngawang Namgyal, escaped to Bhutan after being persecuted in Tibet and began to teach in the region and became a strong religious figure in Bhutan, calling himself Shabdrung Rinpoche. He was able to calm and conquer clans and Tibetan forces; eventually established the southern valley into a unified country, Druk Yul, meaning land of the dragon. He created a distinct political system, built the zdongs that Bhutan is famous for, and established Tantric Mahayana Buddhism. However, when he died in 1717, the country went through 200 years of internal conflict.

Instability lasted until 1907, when Ugyen Wangchuck was elected, by a unanimous vote of Bhutan's chiefs and principal lamas, as hereditary ruler of Bhutan. He ended the dual system of spiritual and temporal leaders that Ngawang Namgyal created and became the first king. Over the following four decades, he and his heir, King Jigme Wangchuck, brought the entire country under the monarchy's direct control. Upon independence in 1947, India recognised Bhutan as a sovereign country.

In 1958, the third king, Jigme Dorji Wangchuck, abolished slavery. Bhutan was formally admitted to the United Nation in 1971. The present and fourth monarch, Jigme Singye Wangchuck, seeks economic self-reliance and what he nicknamed 'Gross National Happiness' . The present king Jigme Singye Wangchuck became the fourth monarch in 1974 and his coronation ceremony saw the entry of foreign media for the first time in the country. The first foreign tourist group entered the country in 1974 and started the process of restricted entry of tourists to save the culture and environment.