The club was founded in 1951 as a member of the University Sports Society Bosna (Bosnian: Univerzitetsko sportsko društvo Bosna). The club's first chairman and coach was doctor Nedžad Brkić, with the roster composed mostly of students enrolled in the University of Sarajevo. The first four years of the club's existence were spent in the lower-tier Sarajevo city league, which the team went on to win in 1955, earning a promotion to the SR Bosnia and Herzegovina league. The team roster in these early years included the likes of Brkić, Marušić, Takač, Bise, Bjelica, Cindrić, Bilić, Đurasković, Fetahagić, Uzelac, Džapa, Pilav, Hofbauer, Lovrenović, Beganović and Dimitrijević.
For the next 17 years the club competed in the regional SR Bosnia and Herzegovina league, steadily building a team with which it could enter the Yugoslav First League. On 28 April 1972 a decisive win against local city rivals KK Željezničar Sarajevo would promote the club to the top-tier of Yugoslav basketball where it would compete for the next 20 years. The architect of the club's historic triumf and later European glory was charismatic young coach Bogdan Tanjević. Players of this era included Terzić, Milavić, Čečur, Pavlić, Nadaždin, Dumić, Soče, Varajić, Pejović, Pešić, Krvavac and Đogić.
The club started its Euroleague season in the Quarterfinal group stage, finishing first in its group. Once in the Semifinals, the side sent a message to contenders by edging the defending champions Real Madrid 114:109 in overtime, in Sarajevo. KK Bosna would eventually win all of its home games and would advance to the title game by edging Greek side Olympiacos 83-88, in Piraeus. Bosna's opponent in the final would either be Emerson Varese or Real Madrid, who faced each other off in the final game of the round. The Italian side beat Madrid 82:83. The aforementioned game will be remembered for Prada's misses: Namely, Luis Maria Prada famously missed 3 consecutive free throws with no time on the clock, forever changing European basketball history.
Once in the title game, KK Bosna downed mighty Emerson Varese 96:93 in front of 15,000 fans in the Palais des Sports, Grenoble, France. Varajić led the team in scoring with 45 points, while Delibašić followed with 30. The former is still the record holder for most points in a Euroleague final. Radovanović added 10 more points, while Americans Bob Morse and Charlie Yelverton scored 30 and 27 points respectively for Varese.
In the next four seasons KK Bosna would go on to win two more Yugoslav championships (1970-80; 1982-83), as well as a silver medal in the 1980 FIBA Intercontinental Cup, which it hosted. A second Yugoslav Cup triumf followed a year later.
After nearly a decade of continuous success, most of the star players transfered abroad in the mid-1980s. Namely, Delibašiš, Varajić, Radovanović, Đogić along with coach Bogdan Tanjević who took over Juventus Caserta moved to foreign clubs. As a result, the club management decided to transfer members of its talented youth departmant to the senior team, along with bringing in a handful of new players from other Yugoslav clubs. Nenad Marković, Gordan Firić, Samir Avdić and others all came in through the youth ranks but their time in the club was cut short by the start of the Bosnian war.
The club remembrance has gathered all players, coach Tanjević, assistant coaches Prodanović, Krehić, first club's coach Halilović and all the Club members who helped Bosna achieve a great success such as the winning of European title. Unfortunately, two key members of Bosna championship team are not alive anymore. Mirza Delibašić and Sabahudin Bilalović have died, but they will be remembered by the club and fans forever. Many great players and coaches from the region joined the remembrance in memory to one great generation of Bosna players and their accomplishments.
KK Bosna traditionally garnered a majority of its fan base from supporters of FK Sarajevo, and more specifically the latter's ultras firm, Horde zla, given the fact that both clubs share unique maroon and white team colours.
Through time the two sides became colloquially interchangeable, as Horde zla equally followed both, with the two clubs forming an unofficial, so-called Maroon Family. On 29 August 2013 FK Sarajevo and KK Bosna's handball sister club, RK Bosna, signed a cooperation agreement based on the principle of strengthening ties between the aforementioned family members. On 6 November 2013 the same was done between FK Sarajevo and KK Bosna Royal, by which the forty-year-old relationship was officialized.
KK Bosna Royal play their home fixtures at the Skenderija Sports Center, located in the Centar Municipality of Sarajevo. It was constructed in 1969 as a cultural and sport center, but was later revitalized and expanded for the 1984 Winter Olympic Games. Below the structure is a shopping mall. It sustained minor damage during the war, but is decaying due to lack of upkeep, it is revitalized since 2007. On 12 February 2012, after a record snowfall in Sarajevo, the roof of one of the halls fell in making that building unusable. The damage after this is said to be 'huge' and is yet unknown if that building will be rebuilt.
In 1977, when Sarajevo was voted to host the 1984 Winter Olympics, they discovered that they needed more than only the brand-new building Zetra to host every figure skating and ice hockey event. So they started to reconstruct and expand the Skenderija into a real state-of-the-art ice-sports centre. It was also chosen as the centre for the representatives and press-reporters.