The Fabian Colonial Bureau was founded in 1940 as a special department of the Fabian Society in order to facilitate research, information gathering, and the development of constructive ideas on colonial policy, etc. It was established after a period of riots, racial tension, and unrest in Africa, the Caribbean, Mauritius, Cyprus, and Palestine, and after a series of Commissions had revealed poverty, disease, political neglect, and administrative difficulties in Britain's overseas territories. The publication of the Colonial Office's White Paper on welfare and development led to the acknowledgement that large sums needed to be spent on the progress of the colonies.

The Bureau's first official member of staff and, along with Arthur Creech Jones, one of its founders, was Rita Hinden, a South African-born economist who had impressed upon the Executive of the Fabian Society the need for a permanent department that would deal specifically with colonial problems from a socialist viewpoint. She served as the Bureau's Secretary for ten years. At its first meeting, the Bureau agreed on the need for a 'clearing-house for colonial information and research', for publicity about colonial affairs in press and parliament, and to press for action on such manageable issues as the recent reduction in cocoa prices and the provisions of the Kenya Defence (Native Personnel) Regulations.

The organisation drew together people with a known interest in colonial affairs. Due to the war, meetings were infrequent at first, though eventually policy meetings were called on monthly intervals. The Bureau made contacts with a variety of bodies, such as the Colonial Office and Anti-Slavery Society, and was soon approached by individuals and groups within the colonies wishing to seek advice or air grievances. It sought to strengthen and extend these contacts through correspondence and the exchange of literature.

In 1941, the Bureau opened its membership to annual subscribers. This resulted in a wider membership, an improved financial position, and a broader market for its publications. Due to wartime restrictions on new publications, the Bureau was forced to take over a small independent journal, which it christened Empire, then Empire. A Socialist Commentary on Colonial Affairs, and finally Venture in 1949. By 1950, Venture was reaching a wide public across over sixty territories.

The Bureau worked closely with the Labour Party in parliament, establishing a panel of members for the purpose of asking informed questions and supplying them with information, and inviting MPs to sit on various study groups and sub-committees. When Labour came to office in 1945, Creech Jones and John Parker, two of the party's colonial specialists, received ministerial appointments, and though Creech Jones resigned the chairmanship of the Bureau on becoming Under-Secretary of State, his close relationship with the Bureau continued. Meanwhile, Frank Horrabin replaced him as Chairman, while Marjorie Nicholson became Assistant Secretary. At the same time, the Bureau faced increasing criticism over its perceived links with Labour, despite its physical independence and lack of support from party funds.

During the latter half of the 1940s, the Bureau worked to hold the party leadership to its pre-election principles, but was forced to accept the constraints of economy, health, and education on the progress towards colonial self-government. The Bureau was also seen by many nationalists as slow-moving and too supportive of the government.

Nevertheless, the Bureau campaigned, often in opposition to the Colonial Office, on a number of issues, including the exploitation of mineral rights, constitutional development, monopolies and restrictive practices, labour relations and conditions, housing and education, racial discrimination, and land utilisation and settlement. After the General Election of 1950, Rita Hinden resigned as Secretary, though she remained as Honorary Secretary, while the Bureau underwent a number of structural changes. In 1958, it changed its name to the Commonwealth Bureau. In 1963, it was amalgamated with the International Bureau, and a few years later it was absorbed back into the Fabian Society.