The British concession was established in 1860, one of a number of new concessions established under the terms of the October 1860 Peking Convention. A site two miles from the city was leased in perpetuity to the British government, with a small ground rent paid annually to China. Land regulations followed in 1866, superseding provisional regulations. The concession, which included the village of Zizhulin, was divided into lots, which were sold to provide an initial budget for development of roads and a bund. The British consul was the ruling functionary, and the actions of the Municipal Council, elected by the land renters from 1862 onwards, were to be approved by him. Residence of Chinese was initially prohibited, although use of nominal British property-holders quickly developed. By 1938 at least 50 per cent of land was owned by Chinese, with more registered under British names.
The concession was first enlarged in 1897, followed by the extra-mural extension after the Boxer Crisis in 1900, which more than doubled the territory of the concession. A further enlargement followed in 1902, when the ground of the proposed American concession was added to the British. The concession was the second largest British controlled or British-dominated zone after Shanghai (excluding Hong Kong), and contained the second largest British population in China (1,300 in 1938). It developed a full range of municipal activities: police, public health, public works.
The concession remained initially largely untouched by the Japanese occupation of Tianjin on 30 July 1937, although policing sovereignty was contested, and the concession became a major flash point in Anglo-Japanese relations in 1939-40. It was blockaded by Japanese troops from 14 June onwards until the British concession authorities handed over to the Japanese 4 men accused of the murder of a Chinese collaborator on 20 August 1939. It was taken over by the Japanese after the declaration of war with the USA and Great Britain on 7 December 1941. The concession was officially handed over to the Chinese government with the Treaty for the relinquishment of Extraterritorial Rights in China, signed in Chongqing on 11 January 1943.