In 1854 and 1856 Ferdinand de Lesseps obtained a concession from Sa'id Pasha, the viceroy of Egypt, to create a company to construct a canal open to ships of all nations, according to plans created by Linant de Bellefonds, a French engineer and high level official of the Egyptian administration of canals, bridges and roads, and by Austrian engineer Alois Negrelli. The company was to operate the canal for 99 years from its opening. De Lesseps had used his friendly relationship with Sa'id, which he had developed while he was a French diplomat during the 1830s. The Suez Canal Company ("Compagnie Universelle du Canal Maritime de Suez") came into being on 15 December, 1858 and work started on the shore of the future Port Said on 25 April 1859.

The excavation took some 10 years using forced labour of Egyptian workers during a certain period. Some sources estimate that over 30,000 people were working on the canal.

The British recognised the canal as an important trade route and perceived the French project as a threat to their geopolitical and financial interests. The British Empire was the major global naval force and officially condemned the forced work and sent armed bedouins to start a revolt among workers. Involuntary labour on the project ceased, and the viceroy condemned the slavery, halting the project.

Angered by the British opportunism, de Lesseps sent a letter to the British government remarking on the British lack of remorse a few years earlier when forced workers died in similar conditions building the British railway in Egypt.

Initially international opinion was skeptical and Suez Canal Company shares did not sell well overseas. Britain, the United States, Austria and Russia did not buy any significant amount of shares. All French shares were quickly sold in France. A contemporary British skeptic claimed:

The canal opened to shipping on 17 November, 1869. Although numerous technical, political, and financial problems had been overcome, the final cost was more than double the original estimate.

The canal had an immediate and dramatic effect on world trade. Combined with the American transcontinental railroad completed six months earlier, it allowed the entire world to be circled in record time. It played an important role in increasing European penetration and colonisation of Africa. External debts forced Said Pasha's successor, Isma'il Pasha, to sell his country's share in the canal for £4,000,000 to the United Kingdom in 1875, but French shareholders still held the majority. Prime minister Benjamin Disraeli was accused by William Gladstone of undermining Britain's constitutional system, due to his lack of reference or consent from Parliament when purchasing the shares with funding from the Rothschilds. 

The Convention of Constantinople in 1888 declared the canal a neutral zone under the protection of the British; British troops had moved in to protect it during a civil war in Egypt in 1882. They were later to defend the strategically important passage against a major Ottoman attack in 1915. Under the Anglo-Egyptian Treaty of 1936, the United Kingdom insisted on retaining control over the canal. In 1951 Egypt repudiated the treaty, and in 1954 the UK agreed to remove its troops, and withdrawal was completed in July 1956.

Construction by Suez Canal Company
Repair by Tāriqu l-Ḥākim
Old Cairo to the Red Sea
Alternatives