Abu Dis is situated on an ancient site, surrounded by deep valleys. Remains have been found of ancient buildings, cisterns, grape presses and caves, one with a columbarium. Ceramics from Late Roman and Byzantine period has also been found.
The French explorer Victor Guérin thought Abu Dis was identical with ancient Bahurim, but this identification is not accepted today.
Abu Dis was one of the most populous villages in the Sanjak of Jerusalem during the 16th century, with a population of several hundred. Wheat and barley formed the bulk of cash crops, but were supplemented by grapes, olives, fruit trees, beans, and products from goats and bees. Descendants of Saladin lived in the village and were entrusted one-third of the grain revenue by the Ottoman Empire. The adult males of the village paid a combined 6,250 akçe in annual taxes, a much more lower figure than other villages of the same size in the sanjak such as Beit Jala, Ein Karim, and Deir Dibwan. This could indicate that Abu Dis was less prosperous, alternatively it could be because it had fewer non-Muslims. In October 1553, Shaykh Sa'd al-Din al-Sharafi al-Maliki was appointed as the administrator of the waqf of the village, but was replaced in 1554 by Muhammad al-Fakhuri at the request of three prominent villagers who complained to the qadi of Jerusalem. He remained in this position until 1563. In 1596 Abu Dis appeared in Ottoman tax registers as being in the Nahiya of Quds of the Liwa of Quds. It had a population of 80 Muslim households, and paid taxes on wheat, barley, olive trees, vineyards, fruit trees, goats and/or bee hives.
When Guérin visited the village in 1870 he noted a house larger and higher than the others, which was that of the local sheikh. An official Ottoman village list from about the same year showed that Abu Dis had 52 houses and a population of 326, though the population count included only men.
By the old village mosque, known locally as Maqam Salah ad-Din, there is a grave with a slab of marble, with a poem written in "elegant naskhi script", dated to 1878.
In 1883, the Palestine Exploration Fund's Survey of Western Palestine described it as a "village of moderate size in a conspicuous position on a bare flat ridge, with deep valleys round it. The water-supply is from cisterns. Rock-cut tombs exists to the west.
In the late 19th century, the Sheikh of Abu Dis, Rasheed Erekat, promised to guarantee the safety of European tourists and pilgrims on the journey down to Jericho and the River Jordan. According to a 19th-century traveler, the "only way of accomplishing the journey to the Jordan ...(is) by paying the statutory tribute-money to the Sheikh of Abu Dees. This man has the privilege of extracting some sixteen shillings from each traveller who goes down to Jericho...He will send a man, possibly his own son along with you... arrayed in gorgeous apparel, and armed with sword and revolver."
In a census conducted in 1922 by the British Mandate authorities, Abu Diz had a population of 1,029, all Muslims, increasing in the 1931 census to a population of 1,297, still all Muslims, in 272 houses.
In 1945, Abu Dis had a population of 1,940, all Arabs, with 27,896 dunams of land, according to an official land and population survey. Of this, 4,981 dunams were used for cereals, while 158 dunams were built-up land.
Between 1922 and 1947, the population of Abu Dis increased by 110%. The town suffered extensive damage in the 1927 Jericho earthquake. All the homes were damaged and every cistern was cracked. Since Abu Dis depended on rain-water cisterns for its water supply, this caused great hardship. al-Eizariya (Bethany), half a mile away, suffered little damage.
According to the UN General Assembly Resolution 194 in 1948, Abu Dis was to be the most Eastern part of the corpus separatum Jerusalem area. However, in the wake of the 1948 Arab–Israeli War, and after the 1949 Armistice Agreements, Abu Dis came under Jordanian rule.
Since the Six-Day War in 1967, Abu Dis has been under Israeli occupation. In the 1967 census it had a population of 2,640. Since the signing of the Interim Agreement on the West Bank and the Gaza Strip (also known as Oslo 2) in 1995, Abu Dis has been part of Area B, which is under the civil jurisdiction of the Palestinian National Authority but subject to Israeli security control.
Most of the Palestinian Authority's offices responsible for Jerusalem affairs are located in the town. In 2000, the construction of a Parliament Building to possibly house the Palestinian Legislative Council was started in Abu Dis, but the project was never finished. Israel has suggested to predestine the location as a substitute for East Jerusalem, the Palestinians' claimed capital. The separation barrier Israel built in Abu Dis runs just few meters from the location.
On January 13, 2004, Israel began constructing the Israeli West Bank Barrier. The route of the barrier between Abu Dis and Jerusalem (East of the Green line) has made it difficult for Abu Dis's residents to access services in Jerusalem without a permit. The barrier will also detach over 6,000 dunums of arable land from the city's total land area of 28,332 dunums. The United Nations humanitarian affairs office charged that the barrier would severely disrupt access to schools, hospitals, and work. Israel says that the route of the barrier is determined by security, not political considerations.
The Cliff Hotel owned by the Ayyad family of Abu Dis has been the focus of a legal dispute in the Israeli courts. The owners sued to halt expropriation of the hotel, built in the mid-1950s. The case involves the application of the Absentee Property Law, which allows the State of Israel to expropriate property within its territory when the owner lives in a country that Israel regards as an enemy. A High Court ruling in February 2010 was still unable to decide whether the law applies to property in East Jerusalem belonging to residents of the Palestinian territories. The government of Norway has supported the Ayyad family. A book about the struggle of the hotel-owner Ali Ayyad and his Norwegian-born wife was published in Norway in 2012.
Schools in Abu Dis include Amal Nursery, Abu Dis Elementary School, New Generation Primary School, Special Needs School, Abu Dis Girls Secondary School, Abu Dis Boys Secondary School, UNRWA Mixed School and Arab Institute. Abu Dis is also home to Al-Quds University.
Abu Dis has a waste disposal site that became operational in the early 1980s. Until 2011, the site received about half of the 1,400 tons of garbage produced every day in the Jerusalem District. The landfill site is overflowing and slated to close by 2013. Camden, a borough of London in the United Kingdom. Since 2005, many Camden residents have visited Abu Dis and many Abu Dis residents have visited Camden. The visits concentrate on children, women and schools. The twinning activities are supported by the Camden Abu Dis Friendship Association (CADFA), a UK registered charity.
Some scenes from the film Omar were shot in Abu-dis, such as the first scene when Omar climbs the Israeli West Bank barrier to visit his lover.Kamel Arekat