Prior to European settlement, the Sammamish River valley from Lake Washington to Issaquah Creek south and upstream of Lake Sammamish was inhabited by a population of as many as 200 Native Americans known as the Sammamish people. The Sammamish were relocated after the Puget Sound War in 1856 to reservations and non-reservation lands.

In 1870, Columbus S. Greenleaf and George R. Wilson filed land claims in the area formerly inhabited by the Sammamish near present-day Bothell, and built homes. Eight families followed over the next six years. In 1876, Canadian George Brackett bought land and began commercial logging out of a camp located on the north bank of the Sammamish River in what is now the heart of downtown Bothell. A store, school, and sawmill followed over the next several years.

In 1885, Brackett sold 80 acres (32 ha) to David Bothell, a settler from Pennsylvania. The town's first postmaster, who bought his property from Bothell, named the town in his honor in 1888. Later that same year, a local railroad was built through the town to transport coal from Issaquah. Bothell was officially incorporated on April 14, 1909.

Bothell continued to grow as logging expanded and boat traffic brought increasing amounts of goods and passengers up and down the river. As more people moved into the area, the Army Corps of Engineers decided to dredge and straighten the river in the years shortly after Bothell's incorporation. Most boat traffic came to an abrupt end only a few years later when Lake Washington was lowered in 1917. Water transport also shifted to trucks after a brick road was built from Seattle. The logging economy declined quickly around the same time, and the local economy shifted to farming. After World War II, better highways and a post-war boom brought suburban development to Bothell. These new neighborhoods and a series of annexations dramatically expanded Bothell's population from about 1,000 in 1950 to over 45,000 as of 2017. Bothell was mostly a bedroom community for people working in Seattle until the 1990s, when business development brought new jobs to create a regional employment center with about 20,000 jobs, many in high technology sectors such as biotechnology and software development. In 1990, a campus of the University of Washington opened in Bothell. In 2010, the city of Bothell began a $150 million program to redevelop downtown, including the demolition of 15 buildings, moving State Route 522, expanding the Bothell–Everett Highway, expanding a city park, and expanding the city hall. A major fire in downtown broke out at the Mercantile Building on July 22, 2016, and damaged and closed more than 20 businesses. The fire dealt a blow to the redevelopment program and required state aid for rebuilding.