Before what is now Indonesia was colonized by the Dutch East India Company, Jambi was the site of a well-established, powerful Srivijayan kingdom that engaged in trade throughout the Strait of Malacca and beyond. It succeeded Palembang to the south, which was a frequent military and economic rival, as the later capital of the ancient kingdom. The move to Jambi was partly induced by the historic 1025 raid by pirates from the Chola region of southern India that destroyed much of Palembang.
In the early decades of the Dutch presence in the region, when the future colonizers were just one of several groups of traders competing with the British, Chinese, Arabs, and Malays, the Jambi sultanate profitably traded pepper with the Dutch. This relationship declined by about 1770, and the sultanate had little contact with the Dutch for about sixty years.
In 1833, minor conflicts with the Dutch, who were well established in Palembang, meant the Dutch increasingly felt the need to control the actions of Jambi. They coerced Sultan Facharudin to agree to greater Dutch presence in the region and control over trade, although the sultanate remained nominally independent. In 1858 the Dutch, apparently concerned over the risk of competition for control from other foreign powers, invaded Jambi with a force from Batavia.
They met little resistance, and Sultan Taha fled to the upriver, inland regions of Jambi. The Dutch installed a puppet ruler, Nazarudin, in the lower region, which included the capital city. For the next forty years Taha maintained the upriver kingdom, and slowly reextended his influence over the lower regions through political agreements and marriage connections.
In 1904, however, the Dutch were stronger and, as a part of a larger campaign to consolidate control over the entire archipelago, soldiers finally managed to capture and kill Taha, and in 1906, the entire area was brought under direct colonial management.