It gradually developed into a commercial port replacing Hoi An in the early 18th century, when European shipbuilding was improved and large deep draught vessels could easily enter Danang Bay.

In 1835, after King Minh Mang ordered: "European vessels are not allowed to anchor to do trade at any harbours except for Han Port", Danang became the largest commercial port in the central region. The local small-scale industries, including shipbuilding, preliminary processing of agricultural, forestry and fishery products, and trade, services prospered accordingly. The French colonists, after establishing their domination of the whole of Vietnam in 1889, separated Danang from Quang Nam Province and renamed the city Tourane and under the control of the Governor General of Indochina.

In the early 20th century, Tourane was developed on a European model, which focused on social infrastructure and manufacture technology. Many kinds of economic activity took shape and thrived, such as agricultural production, small-scale industries, export product processing (tea, food, beverages, ice, alcohol, fish sauce, dried fish), ship building and repair, and services. Together with Hai Phong and Sai Gon, Tourane became an important trading center of the country.

In 1950, French gave the authority over the city to the Bao Dai government. In March 1965, American marine units landed and started to set up a big military complex. The city was defined as a centrally governed city in 1967, and accordingly American troops and the Saigon government built up Danang into a political, military and cultural center of the 1st and 2nd tactical zones. Military bases and such infrastructure as the airport, ports, warehouses, roads, public works, communication stations, and banks were constructed. Industries flourished, resulting in the substitution by industrial zones of handicraft workshops. For example, Hoa Khanh Industrial Zone was used for oxygen, acetylene and detergent production, grind and textiles industries. However, the devastating war made thousands of rural people flee in refugee camps. Urban slums appeared, social evils increased and production came to a standstill.

In 1975, after gaining complete independence, Danang (temporarily under Quang Nam - Da Nang Province) began to overcome the war's severe consequences. Regardless of difficulties, the city's rehabilitation and development had some results, especially after the renovation in 1986.

On 6 July 1996, the tenth session of the 9th National Assembly of the Socialist Republic of Vietnam passed a Resolution separating Quang Nam - Danang Province into Quang Nam Province and Danang city, which was directly responsible to the central government. The new city of Danang consisted of the previous Danang, Hoa Vang Rural District and Hoang Sa Island District.