Home to around 600,000 inhabitants, the city contains over 60% of the nation's population. The settlement was founded in 1888 by the French, on land leased from the ruling Somali and Afar Sultans. During the ensuing period, it served as the capital of French Somaliland and its successor the French Territory of the Afars and Issas.

Known as the Pearl of the Gulf of Tadjoura due to its location, Djibouti city is strategically positioned near the world's busiest shipping lanes and acts as a refueling and transshipment center.

 The Port of Djibouti is the principal maritime port for imports to and exports from neighboring Ethiopia. Additionally, the city hosts a number of foreign embassies, and is the headquarters of many international organizations, non-profit organizations and companies. Djibouti-Ambouli International Airport is the main domestic airport, connecting the capital to various major global destinations.

Foreign visitors to Djibouti City usually like to frequent the shops on Bender Road (Rue de Bender), where myriad things ranging from traditional fabrics and leather products can be found at bargain prices. The newly built Casino Supermarket (Casino Supermarché) is the capital's largest such shopping center. For fresh produce, meat, clothing, and other goods and services, the open Ryad Market (Marché de Ryad) is a commercial outlet of choice.

The Hamoudi Mosque was built in 1906 by Haji Hamoudi. It is among the older standing masjids in the capital. Its size and prominent location have made it a local landmark. The Saoudi Mosque (Mosquée Saoudi) on Boulevard Bounhour is another of the city's main masjids.

The presidential palace is the official residence and principal workplace of the President of Djibouti. It overlooks the Gulf of Tadjoura, with access to both the harbour and airport.

Djibouti City has several public parks, the largest of which is Lagarde Park. It is a popular destination for family gatherings, picnics and sightseeing.