Bajaur was declared a Federally Administered Tribal Agency (FATA) in December, 1973. Prior to 1960, Bajaur almost remained a semi-independent territory and was being treated as an inaccessible area under the political jurisdiction of the Political Agent, Malakand. The early history of this part of the FATA is marked by invasions of different conquerors, including: Alexander, Changez Khan, Tamerlane and Mahmud Ghaznavi.

Bajaur is different from other agencies in its political character as it was ruled and influenced by the dominating Khans of the area. It is the only agency in FATA, which used to contain a number of mini-states or Khanates such as the Khanate of Khar, Khanate of Nawagai and Khanate of Pashat.

In 1973, the Bajaur area was declared as an agency of FATA.