The area has a long tradition with distillation. According to one story, as far back as 1276, an early settler called Sir Robert Savage of Ards, before defeating the Irish in battle, fortified his troops with "a mighty drop of acqua vitae". In 1608, a licence was granted to Sir Thomas Phillips (Irish adventurer) by King James I to distil whiskey.
for the next seven years, within the countie of Colrane, otherwise called O Cahanes countrey, or within the territorie called Rowte, in Co. Antrim, by himselfe or his servauntes, to make, drawe, and distil such and soe great quantities of aquavite, usquabagh and aqua composita, as he or his assignes shall thinke fitt; and the same to sell, vent, and dispose of to any persons, yeeldinge yerelie the somme 13s 4d...
The Bushmills Old Distillery Company itself was not established until 1784 by Hugh Anderson. Bushmills suffered many lean years with numerous periods of closure with no record of the distillery being in operation in the official records both in 1802 and in 1822. In 1860 a Belfast spirit merchant named Jame McColgan and Patrick Corrigan bought the distillery; in 1880 they formed a limited company. In 1885, the original Bushmills buildings were destroyed by fire but the distillery was swiftly rebuilt. In 1890, a steamship owned and operated by the distillery, SS Bushmills, made its maiden voyage across the Atlantic to deliver Bushmills whiskey to America. It called at Philadelphia and New York City before heading on to Singapore, Hong Kong, Shanghai and Yokohama.
In the early 20th century, the U.S. was a very important market for Bushmills (and other Irish Whiskey producers). American Prohibition in 1920 came as a large blow to the Irish Whiskey industry, but Bushmills managed to survive. Wilson Boyd, Bushmills' director at the time, predicted the end of prohibition and had large stores of whiskey ready to export. After the Second World War, the distillery was bought by Isaac Wolfson, and, in 1972, it was taken over by Irish Distillers, meaning that Irish Distillers controlled the production of all Irish whiskey at the time. In June 1988, Irish Distillers was bought by French liquor group Pernod Ricard.
In June 2005, the distillery was bought by Diageo for £200 million. Diageo have also announced a large advertising campaign in order to regain a market share for Bushmills.
In May 2008, the Bank of Ireland issued a new series of sterling banknotes in Northern Ireland which all feature an illustration of the Old Bushmills Distillery on the obverse side, replacing the previous notes series which depicted Queen's University of Belfast.
In November 2014 it was announced that Diageo was to trade the Bushmills brand with Jose Cuervo in exchange for the 50% of the Don Julio brand of tequila that Diageo did not already own. The deal was expected to be completed in early 2015.