While there are indications of experiments with public transport in Paris as early as 1662, the first public transport system for general use apparently originated in Nantes, France in 1826. Stanislas Baudry, a retired army officer who had built public baths using the surplus heat from his flour mill on the city's edge, set up a short route between the center of town and his baths. The service started on the Place du Commerce, outside the hat shop of a M. Omnès, who displayed the motto Omnès Omnibus (Latin for "everything for everybody" or "all for all") on his shopfront. When Baudry discovered that passengers were just as interested in getting off at intermediate points as in patronizing his baths, he changed the route's focus. His new voiture omnibus ("carriage for all") combined the functions of the hired hackney carriage with a stagecoach that travelled a predetermined route from inn to inn, carrying passengers and mail. His omnibus featured wooden benches that ran down the sides of the vehicle; passengers entered from the rear.

There is also a claim from the UK where in 1824 John Greenwood operated the first "bus route" from Market Street in Manchester to Pendleton in Salford.

In 1828, Baudry went to Paris where he founded a company under the name Entreprise générale des omnibus de Paris, while his son Edmond Baudry founded two similar companies in Bordeaux and in Lyons. A London newspaper reported in July 4, 1829 that "the new vehicle, called the omnibus, commenced running this morning from Paddington to the City". This bus service was operated by a George Shillibeer.

In New York, omnibus service also began in 1829, when Abraham Brower, an entrepreneur who had organized volunteer fire companies, established a route along Broadway starting at Bowling Green. Other American cities soon followed suit: Philadelphia in 1831, Boston in 1835 and Baltimore in 1844. In most cases, the city governments granted a private company—generally a small stableman already in the livery or freight-hauling business—an exclusive franchise to operate public coaches along a specified route. In return, the company agreed to maintain certain minimum levels of service. In 1831, New Yorker Washington Irving remarked of Britain's Reform Act (finally passed in 1832): "The great reform omnibus moves but slowly." Steam buses emerged in the 1830s as competition to the horse drawn buses.

The omnibus encouraged urbanization. Socially, the omnibus put city-dwellers, even if for only half an hour, into previously-unheard-of physical intimacy with strangers, squeezing them together knee-to-knee. Only the very poor remained excluded. A new division in urban society now came to the fore, dividing those who kept carriages from those who did not. The idea of the "carriage trade", the folk who never set foot in the streets, who had goods brought out from the shops for their appraisal, has its origins in the omnibus crush.

The omnibus also extended the reach of the emerging cities. The walk from the former village of Paddington to the business heart of London in the "City" was a long one, even for a young man in good condition. The omnibus thus offered the suburbs more access to the inner city.

More intense urbanization was to follow. Within a very few years, the New York omnibus had a rival in the streetcar: the first streetcar ran along The Bowery, which offered the excellent improvement in amenity of riding on smooth iron rails rather than clattering over granite setts, called "Belgian blocks". The new streetcars were financed by John Mason, a wealthy banker, and built by an Irish-American contractor, John Stephenson.

Bus lines proliferated in the U.S. as streetcar lines were torn out of the major cities and transit services became associated with bus manufacturers and oil companies whose goal was the replacement of rail service with buses. This was accompanied by a continuing series of technical improvements: pneumatic "balloon" tires during the early 1920s, monocoque body construction in 1931, automatic transmission in 1936, the diesel-engine bus in 1936, the first acceptable 50+ passenger bus in 1948, and the first buses with air suspension in 1953.

The arrest of Rosa Parks in 1955 for not giving up her seat to a white man on a public bus is considered one of the catalyst events of the African-American Civil Rights Movement of the United States.

Public transport bus operation is differentiated from other bus operation by the fact the owner or driver of a bus is employed by or contracted to an organisation whose main public duty or commercial interest is to provide a public transport service for passengers to turn up and use, rather than fulfilling private contracts between the bus operator and user. Public transport buses are operated as a common carrier under a contract of carriage between the passenger and the operator.