The district was created by Act of Parliament and became operational on 1 July 2005. Formerly part of Pallisa District, Budaka District was created out of the former Budaka County. It consists of the following seven sub-counties: 1. Budaka Sub-County 2. Iki-Iki Sub-County 3. Naboa Sub-County 4. Lyama Sub-County 5. Kaderuna Sub-County 6. Kamonkoli Sub-County and 7. Kameruka Sub-County. The district has one town council, Budaka.
Budaka District covers a total area of 410.4 square kilometres (158.5 sq mi). It lies at an altitude between 910 metres (2,990 ft) and 1,220 metres (4,000 ft) above sea level. The district is densely populated and as of 2012, has an estimated average population density of 435.9 square kilometres (168.3 sq mi).
In 1991, the national population census estimated the population of the district at about 100,300. The 2002 national census estimated the population of the district at approximately 136,500, with an annual population growth rate of 2.8%. In 2012, the population of Budaka District was estimated at approximately 178,900. The predominant ethnicity in the district are the Bagwere. The table below illustrates how the population in the district has grown during the first decade in the 2000s. All numbers are estimates.