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There was a pearl-diving and fishing community at the mouth of Dubai Creek for many centuries, but modern Dubai dates its existence to the 1830s when the Baniyas tribe under the Al-Maktoum family settled there and renounced allegiance to Abu Dhabi. Successive sheikhs encouraged contacts with outsiders, especially the British, who made Dubai a regular port of call.

There are an increasing number of "freehold" villas and flats which come with a guaranteed residence visa renewable every three years for a around US$1350 per person. The Jumeira Palm, an artificial island in the shape of a palm tree, is one of these. It is illegal to seek employment on this visa though, and a separate job visa must be obtained from an employer. It is common practice among Dubai employers to hold on to employees' passports for the duration of the employment contract. This is done to prevent expatriate employees from moving to higher paying jobs. On termination of an employment contract, expatriates and their families are usually banned from the country for six months.

In early 2001, ground was broken for the construction of several churches on a parcel of land in Jebel Ali donated by the Government of Dubai for four Protestant congregations and a Catholic congregation. In May 2001, the Crown Prince of Dubai authorised the construction of a Greek Orthodox church on donated land.

Dubai has become an important tourist destination, helped by its rapidly-expanding airline Emirates, which is headed by Sheikh Ahmed bin Saeed Al Maktoum, an uncle of the emir. Dubai is also diversifying as a hub for service based industries such as IT and finance, with the new Dubai International Financial Centre or DIFC. The government has set up enclaves and freezones for industry specific corporations. Dubai Internet City, now combined with Dubai Media City as part of TECOM (Dubai Technology, Electronic Commerce and Media Free Zone Authority) is one such enclave and houses IT companies such as EMC Corporation, Oracle, Microsoft and IBM, and media organisations such as MBC, CNN, Reuters and AP.

The annual Dubai Shopping Festival (DSF) draws shoppers from the Indian subcontinent and around the region. Other, smaller shopping festivals such as Dubai Summer Surprises are held throughout the year.

Islam is the official religion of all the emirates. A vast majority of the people are Sunnis. There are foreign minority Hindus and Christians as well. Dubai is the only Emirate to house a Hindu temple.

The official language is Arabic, but English and Hindi are widely spoken.

Dubai refers to either one of the seven emirates that make up the United Arab Emirates on the Arabian Peninsula, or that emirate's main city, sometimes called "Dubai City" to distinguish it from the emirate.