First proposed by Thomas Homer in 1802 as a link from the Paddington arm of the then Grand Junction Canal (opened in 1801) with the River Thames at Limehouse, it was built during the early 19th century after an Act of Parliament was passed in 1812. Noted architect and town planner John Nash was a director of the company; in 1811 he had produced a masterplan for the Prince Regent to redevelop a large area of central north London – as a result, the Regent’s Canal was included in the scheme, running for part of its distance along the northern edge of Regent's Park.
As with many Nash projects, the detailed design was passed to one of his assistants, in this case James Morgan – appointed chief engineer of the canal company. Work began on 14 October 1812. The first section, Paddington to Camden Town, opened in 1816 and included a 251 m (274 yd) long tunnel under Maida Hill east of an area now known as 'Little Venice' (a name devised by Robert Browning) and a much shorter tunnel, just 48 m (52 yd) long, under Lisson Grove. The Camden to Limehouse section, including the 886 m (969 yd) long Islington tunnel and the Regent's Canal Dock (used to transfer cargo from sea-faring vessels to canal barges – today known as Limehouse Basin), opened four years later on 1 August 1820. Various intermediate basins were also constructed (eg: Cumberland Basin to the east Regent's Park, Battlebridge Basin (close to King's Cross, London) and City Road Basin). Many other basins such as Wenlock Basin, Kingsland Basin, St. Pancras Stone and Coal Basin, and the basin in front of the Great Northern Railway's Granary were also built, and some of these survive.
In 1927 the Regent's Canal Company bought the Grand Junction Canal and the Warwick Canals, the merged entity coming into force on 1 January 1929 as the Grand Union Canal Company. It was nationalised in 1948. By this time, the canal's importance for commercial traffic was dwindling, and by the 1960s commercial vessels had almost ceased to operate, the lorry taking over the traffic not already lost to the railway in the 19th century.
A new purpose was found for the canal route in 1979, when the CEGB installed underground cables below the towpath between St John's Wood and City Road. These 400 kV cables now form part of the National Grid, supplying electrical power to London.
Due to the increase in cycle commuting since the 2005 London Bombings and increasing environmental awareness, the canal's towpath has become a busy cycle route for commuters.