In 1858, Ferdinand de Lesseps formed the Suez Canal Company for the express purpose of building the canal. Construction of the canal lasted from 1859 to 1869. The canal officially opened on 17 November 1869. It offers vessels a direct route between the North Atlantic and northern Indian oceans via the Mediterranean Sea and the Red Sea, avoiding the South Atlantic and southern Indian oceans and reducing the journey distance from the Arabian Sea to London by approximately 8,900 kilometres (5,500 mi), or 10 days at 20 knots (37 km/h; 23 mph) to 8 days at 24 knots (44 km/h; 28 mph). The canal extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez. Its length is 193.30 km (120.11 mi) including its northern and southern access-channels. In 2020, more than 18,500 vessels traversed the canal (an average of 51.5 per day).

The original canal featured a single-lane waterway with passing locations in the Ballah Bypass and the Great Bitter Lake. It contained, according to Alois Negrelli's plans, no lock systems, with seawater flowing freely through it. In general, the water in the canal north of the Bitter Lakes flows north in winter and south in summer. South of the lakes, the current changes with the tide at Suez.

While the canal was the property of the Egyptian government, European shareholders, mostly British and French, owned the concessionary company which operated it until July 1956, when President Gamal Abdel Nasser nationalized it—an event which led to the Suez Crisis of October–November 1956. The canal is operated and maintained by the state-owned Suez Canal Authority (SCA) of Egypt.

Under the Convention of Constantinople, it may be used "in time of war as in time of peace, by every vessel of commerce or of war, without distinction of flag." Nevertheless, the canal has played an important military strategic role as a naval short-cut and choke point. Navies with coastlines and bases on both the Mediterranean Sea and the Red Sea (Egypt and Israel) have a particular interest in the Suez Canal. After Egypt closed the Suez canal at the beginning of the Six-Day War on 5 June 1967, the canal remained closed for precisely eight years, reopening on 5 June 1975.

The Egyptian government launched construction in 2014 to expand and widen the Ballah Bypass for 35 km (22 mi) to speed up the canal's transit-time. The expansion intended to nearly double the capacity of the Suez Canal, from 49 to 97 ships per day. At a cost of £E59.4 billion (US$9bn), this project was funded with interest-bearing investment certificates issued exclusively to Egyptian entities and individuals. The "New Suez Canal", as the expansion was dubbed, was opened in a ceremony on 6 August 2015.

The Suez Canal Authority officially opened the new side channel in 2016. This side channel, located at the northern side of the east extension of the Suez Canal, serves the East Terminal for berthing and unberthing vessels from the terminal. As the East Container Terminal is located on the Canal itself, before the construction of the new side channel it was not possible to berth or unberth vessels at the terminal while a convoy was running.