Ottoman era begins in 1461 when the city was founded by the first Bosnian governor Ishak-beg Isaković (Ishak Bay Isaković), a pioneer in planned construction. He had the Careva džamija (Emperor’s Mosque) built first; followed by Tekija (Khanqah), lodgings, administrative center and housing court he named Saraj, which is how Sarajevo got its name. In Baščaršija, he builds Kolobara Han (Kolobara Inn), a hotel in modern terms, which was soon surrounded by a multitude of shops creating the economic basis for the development of the city.
During the 15th and 16th century, like many Levant cities at the time, Sarajevo was divided on Čaršija – a commercial area and the peaceful residential areas – Mahala. Mahalas were built on the surrounding slopes from the center towards the outskirts. People lived in mahalas and they did their business in čaršija. The commercial center of the city is Baščaršija. There are over 1000 shops located there. The streets of Čaršija bare names of old crafts: Kazazi (button makers), Kujundžiluk (jewelers), Kazandžiluk (copper smiths), Sarači (sewing quilts and rugs), Mudželiti (bookbinders), Kovači (blacksmiths), Sarači (leather workers), Bazerdžani (head of trade), Ašćiluk (restaurants), while the streets of residential areas had names like Behar (buds), Cvijetna (flower), Karanfil Mahala (coronation mahala), Pod Trešnjom (under the cherry tree), Višnjik (black cherry), Podhrastovi (under the oak tree), Sedam šuma (seven woods).
Sarajevo is also famous for its large number of public taps, shadirvans and fountains (sebilj), which supplied the city with water, as well as decorating it. Sarajevo had water supply system as early as mid-15th century which was not the case in many European cities at the time.
At the beginning of the 17th century, the population of Sarajevo was almost entirely Muslim. But that was not always the case, nor will it be in times to come. This area is the borderline between Eastern and Western Roman Empire and the Romans were never able to Romanize ancient Illyrians. The Slavs managed to impose their language and culture between 5th and 11th century. Between 11th and 15th century, a multireligious state was created and is still remembered for not belonging to anyone but its own people.