In the 1840's the great schools numbered not more than half a dozen in England, and Eton, the largest, catered for fewer than 500 boys. In India, there were a handful of private schools and Military Asylums, educating the children of their neighborhood rather than the public at large.

Bishop Cotton School, Shimla, is the one of the oldest boarding schools in Asia, having been founded on 28th July, 1859, by Bishop George Edward Lynch Cotton, son of an Army Captain, who died leading his Regiment in battle. A scholar of Westminister, and a graduate of Cambridge, in 1836 he was appointed Assistant Master at Rugby by Doctor Thomas Arnold, one of the founders of the British Public School system. It was the young Mr. Cotton who is spoken of as the "the model young master" in Thomas Hughes' famous book "Tom Brown's School Days" which gives an insight to school life at Rugby.

After having taught for 15 years at Rugby, in 1852, he was appointed Master of Marlborough, where he established organized games and the House and prefect systems. He believed that " the prefects are and shall be, long as I am the Head, the governors of the school. As soon as I see this impracticable I will resign….." He was consecrated Bishop at Westminster Abbey by the Archbishop of Canterbury. Queen Victoria personally selected Bishop Cotton as Bishop of Calcutta and Metropolitan Bishop of India, Burma and the Island of Ceylon, keeping in view the critical period in India around 1857.

As Bishop of Calcutta, on 28TH July, 1859, he conducted a service for the foundation of a public school at a hill station. Collections were made. in most of the Churches of the Diocese for this purpose. The collections were utilized to found the Bishop's School at Jutogh, Shimla. The land and the buildings on it were a gift from the Viceroy. Three private houses were purchased by Bishop Cotton out of the India Public School Fund for Rs.17,000/- The school opened for students on 15th March, 1863. Though mentioned in correspondence as the Simla Public School, it never actually bore this name. The first boy, Frederick Naylor, joined the school on 16th March, 1863, "creeping like a snail, unwilling to school," watched by the staff in curiosity and amusement. 35 boys were admitted that year and the school increased its strength  to 65 students by the year 1864. This was the highest number the buildings and grounds permitted. A change of site was then deemed necessary because the Jutogh site was divided by a public road which was inconvenient. Bishop Cotton personally reconnoitered ten sites in September and October 1864, and finally approved the South end of Knollswood Spur which belonged to the Rajah of Keonthal. After lengthy negotiations the site was acquired through the intervention of the Viceroy and the foundation stone for the new buildings was laid on 26th September 1866, by H.E. the Viceroy, Sir John Lawrence, elder brother of Sir Henry Lawrence, founder of the Military Asylum at Sanawar (now known as Lawrence School). In September 1868, the school moved to Knollswood, our present site.

A fortnight after laying the foundation stone, Bishop Cotton drowned in an accident on 6th October, 1866 while touring Assam in the Governor's yacht on the river Gorai. To perpetuate the memory of its founder, the name of the school was changed to Bishop Cotton School in 1867. Also one of the houses, both at Rugby and Marlborough, was named Cotton House. Two Schools, one in Bangalore and the other in Nagpur were also established in his memory and St. Paul's School, Darjeeling, (founded in 1823 and shifted from Calcutta to Darjeeling by Bishop Cotton) also erected a Cotton Hall in his memory.

Bishop Cotton School is the first of its kind in this part of the world, to start the house system, organized games and the prefect system which were begun almost at the same time as they were developed in England. At the old schools in England, boys from a distance lodged at private, commercially run houses and attended the schools as day scholars. The 1840's saw a transition between the old style Dames' Houses, and a system whereby masters augmented their teacher's income by running boarding houses, doing business directly with the parent, and being known therefore as "Housemasters".  

The school grew from strength to strength under the stewardship of the first Headmaster, Rev. Samuel Slater, who had been brought from St, Paul's School in Calcutta, and who went on to serve Bishop Cotton School for twenty-two years, thereby laying a solid foundation and  transforming the School into a prestigious institution which grew to attract students from among the Indian elite as well. By the turn of the century the reputation of the School was undeniable and greatly helped by staff who were mainly educated at Oxford and Cambridge.

On Sunday, 7th May, 1905, whilst most of the boys were on "Khud Leave", the school caught fire. The complete school was burnt except the Headmaster's Lodge (1868), the Hospital (1868) and the Senior Master's House (1873). The school was rebuilt and occupied in July 1907. The school Chapel which was originally consecrated on 21st September 1871, was rebuilt and used from 3rd April, 1908.

In 1926 a hostel was constructed for the Simla Hill Chiefs' sons and relatives at a cost of Rs. 41,000/- financed entirely by the Hill Chiefs.

Later the hostel was expanded and nine more rooms were added and became the College Section of the school, preparing the boys for the Intermediate Examinations. In 1959, the Centenary Year, dormitories were constructed on the first floor to house one hundred and forty small children.

In 1937 a Prep School was opened by buying the Ayrcliff Girls' School, (now the Tibetan School in Chotta Shimla) for Rs. 35,000/-. In December 1947 the Prep School was closed as 42 Pakistani and 98 British and European boys left India and the School. The Prep School was finally sold in 1961 to the Dalai Lama, having been on rent to the Government from 1948 .