The municipality was established as a local municipality in 2000 after South Africa's reorganisation of municipal areas, and is named after the Buffalo River, at whose mouth lies the only river port in South Africa. On 18 May 2011, it was separated from the Amathole District Municipality and converted into a metropolitan municipality.

The area has a well-developed manufacturing base, with the auto industry playing a major role. Daimler AG through its wholly owned subsidiary Mercedes-Benz South Africa (MBSA) has a large assembly plant located next to the port of East London, which produces a variety of vehicles for export.

The climate is mild, with year-round sunshine. Average rainfall is 850mm (33.5 inches).

The population of 701,873 (2001) is largely African (85.2%), with White (8.4%) and Coloured (5.7%) minorities. There is also a small Indian community (0.6%).

The previous mayor, Dr Sindisile Maclean (ANC), was elected in 2000. Buffalo City elected its first female mayor on Friday, 17 March 2006. Ntombentle Peter was voted in as Executive Mayor at the inaugural meeting of the new council following the municipal elections.