Terengganu's location by the South China Sea ensured that it was on trade routes since ancient times. The earliest written reports on the area that is now Terengganu were by Chinese merchants and seafarers in the early 6th century A.D. Like other Malay states, Terengganu practiced a Hindu–Buddhist culture combined with animist traditional beliefs for hundreds of years before the arrival of Islam. Under the influence of Srivijaya, Terengganu traded extensively with the Majapahit Empire, the Khmer Empire and especially the Chinese. Terengganu was the first Malay state to receive Islam, as attested to by a stone monument dated 1303 with Arabic inscriptions found in Kuala Berang, the capital of the district of Hulu Terengganu. Terengganu became a vassal state of Melaka, but retained considerable autonomy with the emergence of Riau-Johor.
Terengganu emerged as an independent sultanate in 1724. The first Sultan was Tun Zainal Abidin, the younger brother of a former sultan of Johor, and Johor strongly influenced Terengganu politics through the 18th century. However, in the book Tuhfat al-Nafis written by Raja Ali Haji, in the year 1708, Tun Zainal Abidin was installed as the Sultan of Terengganu by Daeng Menampuk also known as Raja Tua under the rule of Sultan Sulaiman Badrul Alam Shah. In the 19th century, Terengganu became a vassal state of Siam, and sent tribute every year to the Emperor of Siam in the form of bunga mas (a tree with flowers and leaves made of gold). Under Siamese rule, Terengganu prospered, and was largely left alone by the authorities in Bangkok. The terms of the Anglo-Siamese Treaty of 1909 saw power over Terengganu transferred from Siam to Great Britain. A British advisor was appointed to the sultan in 1919, and Terengganu become one of the Unfederated Malay States. The move was highly unpopular locally, and in 1928 the British used military force to suppress a popular uprising. During World War II, Japan transferred Terengganu back to Siam, along with Kelantan, Kedah, and Perlis, but after the defeat of Japan, these Malay states returned to British control. Terengganu became a member of the Federation of Malaya in 1948, and a state of independent Malaya in 1957.
In 1999, following decades of rule by UMNO—the senior partner in the Barisan Nasional (National Front) coalition —the Islamic Party of Malaysia (PAS) won the 1999 local election, making Terengganu the second state in Malaysia to be ruled by the islamist government of PAS (the first being neighboring Kelantan). However, in the general election of 2004 Terengganu was recaptured by UMNO.