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Ismailia itself is the seat of the Suez Canal Authority, which manages the canal and regulates shipping traffic; since 1932 there has been the Ismailia Museum, built in the neo-Pharaonic style, whose garden contains sculptures from the nearby archaeological site of Tell el-Maskhuta (Pithom), which were discovered during the construction of the Ismailia Canal. Since 1976, Ismailia has been home to the Suez Canal University.
Near the city is the El Ferdan Bridge, the longest swing bridge in the world.
The Ismailia Stadium, located in the city, is used by the Ismaily SC football club and for major events such as the 2006 African Football Championship.
From August 1974 to July 1979, the city was the headquarters of the United Nations Emergency Force (UNEF II). In 2008, about 10 military observers of the United Nations Truce Supervision Organization (UNTSO) are still stationed in the city.
Ismaïlia in present and past times is mentioned in detail in Markus Werner's 1999 novel Der ägyptische Heinrich (The Egyptian Henry), in which the Swiss author traces the life story of his great-great-grandfather Heinrich Bluntschli and his role as director of the post office in Ismaïlia in the 1960s.
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Ismailia was originally laid out as a residential town for canal workers, engineers and officials, mostly from France, Britain and Greece. The foundation stone was laid on 17 April 1862 by the Inspector General of the Suez Canal Company and was initially named the village of Timsāḥ (Arabic قرية التمساح Qaryat at-Timsāḥ). After the accession of the Khedive (Viceroy) Ismail Pasha on 18 January 1863, this settlement was renamed Ismailia and became the capital of the Canal Governorate. During the canal works, it was the most important town along the Suez Canal and headquarters of the Suez Canal Company. To ensure the supply of drinking water, the freshwater canal, also called the Ismāʿīlīya Canal, was constructed between 1861 and 1863 by French engineers from the Nile at Shubraal-Chaima through the Wadi Tumilat to Ismailia.
In 1864, the settlement already had several streets with residential buildings, a central square and a government building. In 1868, the connection to the railway network was made. However, the splendor and importance of the city were lost as quickly as they had come. Indeed, after the completion of the canal works and the opening of the canal on 17 November 1869, most of the workers were relocated to Port Said.
Between 1870 and 1890, about 3,000 inhabitants lived here. In the following period, the population increased steadily. In 1928 already 15,507 inhabitants were counted here and in 1950 about 50,000 inhabitants. These were mainly foreigners. Until the British withdrew in 1954, they also used Ismailia as a garrison town. The headquarters of the British military and the civil administrative centre of the Canal Zone were located here. Troops were mainly stationed in the southwestern suburb of Moascar (Arabic المعسكر al-Muʿaskar 'the troop camp'). Since 1916, the British also owned a military airfield here, 4 kilometers west-northwest of the city, the Royal Air Force Ismailia Airfield, which is now used by the Egyptian military. Another military airfield was built by the British in the 1930s, the Royal Air Force Base Deversoir (LG-209), located 19 kilometers to the south-southeast.
In 1916 ʿAbdul-Baha' (1844-1921), the eldest son of the founder of the religion Bahāʾullāh, arrived in Ismailia and founded a Baha'i center around the city. In 1928, Hasan al-Bannā (1906-1949), a primary school teacher, founded the Muslim Brotherhood. El-Bannāʾ had been appearing as a preacher in local cafes since 1926. Initially, the Brotherhood was still supported by the Suez Canal Society so that a school and a mosque could be founded here. However, the Muslim Brotherhood prevented the spread of the Baha'i religion. The Brotherhood grew very rapidly. In the early 1940s, the secret military wing of the Brotherhood emerged. The Brotherhood's hostility to the British became increasingly visible. They carried out anti-British attacks and supported the Palestinians in the emerging Middle East conflict in what was then Mandate Palestine. The Brotherhood's struggle against the British led to a full-scale petty war in the late 1940s, and the Brotherhood then supported the overthrow of the Free Officers in July 1952.
From October 1951 onwards, clashes between British troops and the local Egyptian police became increasingly frequent. The climax was reached on January 25, 1952, when 50 Egyptian policemen were killed in a six-hour skirmish between the two forces. January 25 later became the Egyptian police's day of honor. A day later, this news reached Cairo, where there was massive rioting against the British occupation and looting by fire. This day, on which large parts of downtown Cairo were destroyed, went down in history as "Black Saturday".
Today Ismailia is the seat of the Suez Canal Authority, which was established by law on 26 July 1956.
Since 1963, the city has been the capital of the al-Ismaʿiliyya governorate, which was created by partition from the Canal governorate.
After the Six-Day War in 1967, many residents left the city or were evacuated. On October 6, 1973, Egyptian forces crossed the Suez Canal at five points along it, including north of the city, initiating the Yom Kippur War, called the October War in Egypt. On 24 October 1973, the ceasefire reached by the UN was declared. Ismailia was subsequently the headquarters of the United Nations Emergency Force (UNEF II) from August 1974 to July 1979. Military observers from the United Nations Truce Supervision Organization are still stationed here today. After the ceasefire, however, only some of the inhabitants returned to the city.
In 2006, the city had a population of about 293,000, and the greater Ismailia area had a population of about 750,000.
