The Institute was established in March 1961, as the Institute for town planning of Banjaluka. The expansion of the work carried out through the Institute started in 1969, after the earthquake, when the Institute created all the plans for reconstruction of the town of Banja Luka. At that time the Institute started to create a new urban plan of Banja Luka. The new urban plan was adopted in 1975, and that was the first urban plan that worked out according to the new Law on physical planning of 1974.
In period from 1975-1993, the Institute grown into spatial-planning and urbanism-designing organization of regional character.

In accordance with valid Law on enterprises and Law on social capital, the Institute was constituted as joint-stock company in mixed ownership in 1991 year.

In February 1993 year, the Institute was declared as the organization of special interest for Republic of Srpska with Decision of Government of RS, under title Institute for Urbanism of the Republic of Srpska.

Parliament of shareholders brought the Decision in 2001 year about forming the Joint-stock company of Institute for Urbanism of the Republic of Srpska, j.s.c. Banjaluka.