In 1970, in order to honour the previous Sultan, Sultan Omar Ali Saifuddin and his 17-year reign, Brunei's capital Brunei Town was renamed Bandar Seri Begawan. Located in the most populated region of Brunei - the Brunei/Muara District - the city covers 15.8 sq. kilometers and has a population of some 56,000 people. It is a richly varied and historic city - as well as being the modern administrative centre for government and commerce. Within the capital is the famous Kampong Ayer (water village), which has been in existence for centuries. The most important building in the city is, however, the Royal Palace, seat of government and official residence of the Sultan.

The former ruler had assumed the little "Seri Begawan Sultan" after he handed over the throne to the present king His Majesty Sultan and Yang Di-Pertuan Sultan Haji Hassanal Bolkiah. Before the establishment of Brunei Town on the mainland in 1906, Kampong Ayer represented the essence of Brunei. Since that time, the number of traditional Malay water homes has decreased as more people have accepted government offers of resettlement on the land.

Today, Kampong Ayer is still home to more than 30,000 people who live in the traditional way in houses built on stilts and huddled together on the Brunei river. Yet, the interior of these houses are now very modern with full services - such as electricity and piped fresh water. In addition, Kampong Ayer now has its own community services such as schools and health clinics while traditional Bruneian cottage industries such as cloth-weaving, silver crafting, brass casting and fishing continue to flourish in the area. It is an area throbbing with life and it is in many ways still the "heart" of Brunei Darussalam. The majority of Kampong Ayer residents work for either the government or the private sector on the mainland and each morning commute to the mainland, where they keep their cars.