Sultan Babullah Airport was constructed in 1970 and inaugurated in 1971 by then Minister of Transportation, Frans Seda. The airport was built on the site of a former clove plantation and initially featured a runway measuring 1,100 m × 30 m. In the early years of its operation in the 1970s, the airport was still considered a rural airstrip and served only pioneer routes to Ambon and Galela, operated by Merpati Nusantara Airlines using the de Havilland Canada DHC-6 Twin Otter. In 1982, the airport was upgraded to accommodate larger aircraft such as the Fokker F27. By the late 1980s, the airport was already connected to major cities in Eastern Indonesia such as Ambon and Manado, with flights operated by Merpati Nusantara Airlines. Along with Pattimura Airport in Ambon, the airport was designated as one of the two main points of entry to what was then Maluku, prior to the creation of North Maluku province, from other parts of Indonesia.

The airport has been the site of several demonstrations over the years, some of which have disrupted air traffic. On 18 January 2005, hundreds of nearby residents occupied the airport in protest over the government’s failure to pay land compensation related to its development. The occupation ended after a representative of the protesters was flown to Jakarta to meet with officials from the Ministry of Transportation. On 22 August 2007, the airport was again the site of a major demonstration that escalated into riots involving more than 1,000 people, linked to the North Maluku gubernatorial elections. Several police officers and protesters were injured, including four rioters who were shot by police. In addition, due to its proximity to Mount Gamalama, an active volcano, the airport has been temporarily closed several times during eruptions.

In 2008, Batavia Air launched the first direct flight between Jakarta and Ternate using a Boeing 737-300. The service continued until 2013, when the airline ceased operations. The Jakarta–Ternate route was briefly taken over by Express Air, which operated Boeing 737-300 or Boeing 737-500 aircraft, though the service was also short lived. Meanwhile, Garuda Indonesia launched its Jakarta–Ternate route in 2010 using a Boeing 737-300, initially with a stopover in Manado, before later upgrading it to a direct service operated by the Boeing 737-800.

In April 2017, ownership of the airport was transferred from the Ternate city government to the Directorate General of Civil Aviation under the Ministry of Transportation.

To accommodate the anticipated growth of tourism in Ternate and North Maluku, plans are being considered to upgrade the airport to international status, along with the introduction of direct flights to destinations such as Australia and Japan.