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The Bayou as a natural feature drained the swampy land of a good portion of what was to become New Orleans into Lake Pontchartrain. In its natural state, it extended much further than today; colonial era and early 19th-century maps show it had tributaries or branches (at least seasonally) reaching into what are now the Broadmoor neighborhood, the New Orleans Central Business District just back from St. Charles Avenue above Lee Circle, the Carrollton neighborhood, the Treme neighborhood, and a branch connecting to Bayou Gentilly.
The portion still in existence today was navigable by canoes and similar small vessels, used by Native Americans since Pre-Columbian times. The natives knew the waterway as Bayouk Choupic. There was a portage between the Bayou and the Mississippi River, which attracted early French explorers, traders, and trappers, some of who established a small community here by the late 17th century. In 1701 a small fort was established by the French beside the Lake Pontchartrain end of the Bayou to protect this important route; Fort St. Jean would be known to later generations of New Orleanians as “Old Spanish Fort”. The Bayou and portage was a key factor in the selection of the site where the city of New Orleans was founded in 1718, by the river end of the portage route.
In colonial times the portage trail became Grand Route St. John, later replaced as the main route by the wide straight Esplanade Avenue. The Carondelet Canal was dug to connect the back of the city along the River with the Bayou, and the Bayou dredged to accommodate larger vessels.
An area along Bayou St. John was reputedly the location of many voodoo rituals by Marie Laveau.
In the early 20th century, commercial use of the Bayou declined, the Carondelet Canal was filled in. A number of New Orleanians started living in houseboats on the Bayou. Complaints from people in nearby neighborhoods and sanitation concerns led to this being outlawed in the 1930s. A Works Progress Administration cleaned up and beautified the Bayou. A lock was installed near the Lake Pontchartrain end of the Bayou. In the summer of 1955 the New Orleans Sewerage and Water Board temporarily drained the Bayou to clean out debris and material that was causing foul odors.
The Bayou then took on the role it has had since as a picturesque bit of water with small earthen levees on either side forming a narrow bit of park space in the city. From the mid 20th century on, the banks of the Bayou across from City Park became a favorite destination for young couples seeking privacy. The banks of Bayou St. John are an important meeting place for the Downtown Mardi Gras Indian tribes for their “Super Sunday” parade after Carnival.