In 1877, Sultan Abdul Momin of Brunei granted the territories of northeast Borneo -- including all islands within three marine leagues of the coast -- to the North Borneo Chartered Company. Jambongan fell under this sweeping transfer. By 1894, Governor Charles Vandeleur Creagh had established a customs station on the island, staffed by a single native clerk and one policeman. This modest outpost enraged a local leader named Mat Salleh, who had inherited administrative authority over the Sugut River from his father, the former Chief of Sulu. When the Company introduced poll taxes and boat permits, Mat Salleh saw an intolerable encroachment on his people's rights. The murder of two Iban Dayak agents of the Company on the island drew Jambongan into the broader Mat Salleh rebellion, one of the most significant uprisings against colonial rule in North Borneo.

When the Japanese occupied Borneo during World War II, they imposed their own taxes on Jambongan's islanders. But the occupation brought something the British administration never had: an atmosphere of open terror. Villagers who disobeyed were taken away and killed. After the death of a local villager at Japanese hands, fear transformed into resolve. Many islanders became resistance members, collaborating closely with the British in the lead-up to the Allied liberation of Borneo. The British, who had been colonial administrators extracting taxes and imposing permits, were now perceived as saviors -- a bitter irony born of the cruelties of a worse occupier. After Japan's defeat, the British returned to administer the island through the late 1950s, and village heads served as intermediaries between colonial authority and local life until Malayan independence reshaped the region.

Between 50,000 and 9,000 years ago, when sea levels were 36 meters lower, Jambongan was not an island at all. It was part of a continuous landmass called Greater Sabah, connected to Balambangan, Banggi, and Malawali. The waters rose, and the land fractured into an archipelago. Today the island sits within the Coral Triangle, its terrain formed of sandstones and shales from the Bongaya formation, generally flat or gently undulating, reaching a high point of 156 meters at Buli Gantungan Hill. Among the northern islands of Sabah, Jambongan holds the widest mangrove area. Dugongs have been sighted in its waters, along with Irrawaddy dolphins and Indo-Pacific humpback dolphins, though encounters are rare.

In the 1980s, an El Nino-related fire tore through the Jambongan Forest Reserve, destroying much of the natural forest. What replaced it was not jungle but fern and Imperata cylindrica grassland -- a hardy, fire-adapted cover that resists reforestation. The landscape carries this scar visibly. In 2011, a replanting effort began, using fast-growing tree species to re-establish forest cover over the burned areas. The island's Class 1 Protection Forest status prohibits timber harvesting, but threats persist: attempts to expand oil palm milling operations on the island have drawn protests, as the mills damage water sources and ecosystems. Meanwhile, the Bajau-Ubian and Suluk communities who call Jambongan home continue their fishing traditions, receiving annual government fuel subsidies and living allowances through Malaysia's Fisheries Development Authority.