IBA is the oldest business school outside North America. It was established in 1955 with initial technical support provided by the world famous Wharton School of Finance, University of Pennsylvania; later, the University of Southern California set up various facilities at the Institute and several prominent American professors were assigned to the IBA. The course contents, the curriculum, the pedagogical tools and the assessment and testing methods were developed under the guidance of reputed scholars from these two institutions. IBA has zealously guarded the high standards and academic traditions it had inherited from Wharton and USC while adapting and adjusting them with the passage of time.

Till 1994, the University of Karachi awarded degrees to the graduates. In that year, the Sindh Assembly elevated the Institute's status to that of a degree-awarding institution. Despite a rapid increase in the number of business schools, the IBA has maintained its position as the premier Institution of higher learning in the field of Management and Business Administration.

The IBA initially offered its MBA program only for day scholars. In 1957, an Evening Program was started to cater to the needs of the numerous working executives and managers who were interested in furthering their careers through part-time business studies. In 1982, a three-year BBA (Honors) Program was introduced which has now been upgraded to a four-year BBA program.

The Faculty of Computer Science was originally established as the Center for Computer Studies in 1983 with the collaboration of IBM, Pakistan. It initially offered a diploma in System Analysis to overcome a shortage of software professionals in the country. It now offers BS (Computer Science), MS (Computer Science), and PhD programs. The PhD degree is being offered in the areas of Computer Science and Engineering (CSE), Information and Communication Technology (ICT), Operations Research, Artificial Intelligence, Cryptography, Numerical Analysis and Numerical Computing.

In 2009, IBA introduced its first weekend Executive MBA Program (EMBA), focusing on the needs of the mid-career professionals, serving in the Corporate Sector, Banks and Government departments. The curriculum, methodology and course material have been developed in consultation with industry experts and lead resource persons. Currently 280 participants from more than 100 organizations are attending this program steered by leading professionals and senior IBA faculty.

IBA has recently introduced new BS degree programs in Economics and Mathematics (Double Major), Social Sciences, Accounting and Finance and also MS/ Ph.D. programs in Economics and Mathematics.

The Center for Executive Education (CEE) organizes customized courses for corporate clients and holds short courses on emerging issues and themes for those engaged in business. CEE has strategic partnership with the Indian School of Business whose faculty conducts courses and seminars at Karachi.

The newly established Center for Entrepreneurial Development (CED) at the IBA is a breeding ground for new business startups by the students. The Center hosts more than 40 incubator and accelerator companies in its premises and provides a conducive research and development environment f o r innovation, and turning ideas into business opportunities. It aims to put Karachi on the entrepreneurial map of the world. IBA has a 10 year collaborative partnership with Babson College in Boston which is the top most entrepreneurship institute in USA.