By now, the region of East Africa appeared ripe with potential to the British for taking it over. The topic stirred an unusual amount of passion, conscience, and debate among the British political parties and the ruling classes. In the end, an overpowering sense of Victorian pride and scientific inquiry led the British to take a lead role in the exploration. The British consul from 1873 to 1886 was John Kirk (1832-1922), who advised Sultan Barghash to raise an army and annex most of eastern Kenya and Tanzania. Refusing this advice, the sultan was helpless in the face of European territorial imperialism. German imperialists led the way, and their claims were upheld at the Congress of Berlin.In 1886 the British recognized the German sphere of influence over coastal Tanganyika (part of present-day Tanzania), retaining the Kenya area for themselves. A further territorial division took place in 1890.

In 1887 the Imperial British East Africa Company (IBEA) was founded with its headquarters in Mombasa. Officers from the IBEA immediately began to establish outposts throughout the Kenyan interior. They carried with them a flag bearing the motto "Light and Liberty," signifying the anti-slavery sentiments of the day. Between 1888 and 1890 a contingent of British officials and soldiers cut a 500-kilometre-long dirt road to a swampy, flat area called Nyrobi by the Maasai, meaning "place of the cold waters." Fort Smith was built nearby as a British fortress and upcountry outpost.

The Imperial British East Africa Company also played a critical role in the eventual development of a railway from Mombasa to Lake Victoria. In 1902 all Kenya became a dependency under the Colonial Office. It became the British base of operations in the protracted East African campaign against the Germans during World War I. The type of government established in Kenya was the crown colony system. The governor and the secretariat were appointed from London. Most Africans, however, continued to be ruled in some fashion by their own leaders under the general guidance of a British district officer. Tribal lands were guaranteed, but all unoccupied territory became crown land. Even before 1900 some white colonists had recognized the economic value of the highlands and had begun to settle the fertile lands adjacent to Nairobi. By the close of World War I more than 9000 Europeans were in Kenya, and much of the highlands had been reserved for continual white settlement. The government, claiming to be concerned with "native paramountcy," actually favored the productive white minority. African economics and politics were closely monitored at a time when the depression of the 1930s and an expanding population showed the inadequacy of the land reserved for the natives.