When news of the Fall of Calcutta reached the headquarters of the East India Company at Fort St. George in Madras, now Chennai, India, and expeditionary force under Robert Clive, who had led the English to victory against the French in southern India, and Admiral Charles Watson, was sent to Calcutta. Clive and Watson took the city back from Nawab Sirajuddaulah on January 2, 1757 and a semblance of peace was restored. However, both sides prepared for war. Sirajuddaulah's insane regime had left too many people unhappy all over Bengal and the Company did not have problems mustering support, both financial and political, for the war effort. On June 23, 1757, the small Company army met the Nawab's vast army equipped with French artillery at a mango grove near the village of Plassey a few miles from the Nawab's capital at Murshidabad. The Nawab's commander-in-chief, Mir Jafer at this point defected to the English lines, turning the battle against the Nawab. The fleeing Nawab was assassinated shortly afterwards and Clive crowned Mir Jafer the Nawab of Bengal. The Battle of Plassey was the first major victory against an Indian ruler and is widely regarded as the first step towards the establishment of the British Empire. The Company received, as a token of gratitude, from Nawab Mir Jafer, an area of land called the Twenty-Four Parganas to this day, a fertile land full of rice fields, that would provide Calcutta a perpetual supply of provisions.

The Company built a second Fort William south of the original one. The old fort although heavily armed had been unable to fire its guns at the enemy as the city was too close to it. Learning from their past mistakes, the Company cleared a large tract of forest around the new Fort William so that the guns could be fired in all directions from the fort. This large tract lives on to this day as the Maidan, Calcutta's primary address for all outdoor activities. In spite of their foresight, the designers of the fort had little reason to worry about defense against invasions. Fort William never fired a single shot in war in its history. In the same year, Raja Nobo Kissen Deb of Sovabazar, one of the main financiers of the Company, celebrated the first public Durga Puja in honor of Clive. Thus began the liveliest festival of the City of Calcutta.

Calcutta was then closed to families of Company employees, as it was still not safe for English wives to live in a city that had just lived through the infamous Black Hole. The Company servants were, therefore, bachelors in their twenties and thirties with little social life than an excess of the most crude consumption of food, drink and carnal pleasures.

In 1764, Clive went to battle again in Buxar and managed to defeat the combined forces of the Nawabs of Bengal and Oudh and the Mogul Emperor Shah Alam II. In 1765, the once mighty Mogul Empire was forced to sign a treaty with the East India Company granting them the right to collect taxes in the provinces of Bengal, Bihar and Orissa, on behalf of the Emperor, granting de facto ownership of the riches provinces of India. In 1773, the British Parliament passed a regulating act renewing the charter of the Company and acknowledging the rule of the Company over Bengal. The capital of Bengal was moved to Calcutta from Murshidabad and Madras (now Chennai) and Bombay (now Mumbai), the other Indian possessions and predecessors of Calcutta, became subordinates under the Governor-General of The Bay of Bengal, whose office was at Fort William. The first governor-general was Warren Hastings.

Trade flourished in Bengal as it had done for most of its history. In 1767, private trade by the servants of the Company had been banned greatly increasing the profitability of the Company. In 1773, Calcutta began exporting opium to China. Calcutta's growth for the next century depended greatly on its opium exports to China, which was found to be superior to China's native varieties from Yunnan and Sichuan. In 1813, the East India Company's monopoly on trade with India ended, bringing in hundreds of Scots entrepreneurs as well as local noblemen into the now lucrative trade with Britain. These new traders began to build their large offices on Clive Street. Many of them stand to this day and continue to trade in much the same manner to this day. In 1833, the East India Company lost its rights to trade in India, but was entrusted with the government of British possessions in India under the authority of a Governor-General of India and his Executive Council.

The East India Company's domain had by then become vast. They had successively defeated the regional powers in India and the few who remained were reduced to vassal states under the Subsidiary Alliance, where the Company was responsible for the defense and external affairs of the state while the Company did not interfere with its internal governance. The once mighty Mogul Emperor was no exception either. A large number of former rulers were also pensioned off who left their native places to live in the pomp and grandeur of Calcutta, and to add to it. Such examples were the sons of Tipu Sultan, former Nawab of Mysore, the descendents of the Nawab of Bengal and the former Nawab of Oudh, who made lively the neighborhoods of Tollygunge, Chitpore and Metiabruz respectively.

The amount of building activity in Calcutta was at its peak. As Calcutta metamorphosed from a trading outpost to the capital of a mighty empire, the government built a number of imposing buildings. St. John's Church was rebuilt on the site of the old chapel in the old Fort William. This served as the cathedral until the St. Paul's Cathedral was built in the 1830s. Courts and offices, churches and residences lined the streets of Calcutta. This was supplemented with Indian landlords moving to Calcutta and building their own fine mansions and palaces, most of which stand to this day.

With the establishment of the Company as the primary power in India, there was soon ample time to look into other aspects of social life than trade and war. A group of orientalists led by Sir William Jones formed the Asiatic Society in 1784 for the study of Asian art, culture and literature. Fort William College was established in 1800 for Englishmen stationed in Calcutta. In 1817, a group of Hindu philanthropists of Calcutta founded the Hindoo College to give access to western education to Hindu youth. Hindoo College, renamed Presidency College in 1855, soon became a school of revolutionary thought and fuelled the imagination of generations of students. Amongst its many alumni are heads of state of Bangladesh, India and Pakistan, as well as noted scientists. Presidency College continues to be a hallowed educational institution to this day. In 1835, Jesuits opened St. Xavier's College, another educational tradition that lives to this day and in 1836, a French employee of the Company, Major-General Claude Martin's endowment led to the establishment of La Martiniere School. The influx of Western thought did not in any way undermine traditional education. Sanskrit College continued to teach Sanskrit and other Indian languages while Calcutta Madrasah provided education in Arabic and Persian. The juxtaposition of such institutions helped in making the Calcuttan educated simultaneously in the oriental and occidental cultures. Orthodox religions gave way to reforms and from this was born a society so rich in values, that it knew no bounds of race or religion and became an example for the world to follow.

The Company's rule also introduced the rule of written law in the region after a long time. Towards the end of the eighteenth century, Lord Cornwallis established the Supreme Court at Calcutta, the then Governor-General. The Supreme Court was located at the present site of St. Andrew's Kirk, next to the Writers' Building. The name of the street, Old Court House Street is all that alludes to the old court. The Supreme Court presided over the high courts of Bombay and Madras. Later, the Supreme Court was abolished and a High Court was established at Calcutta. All High Courts had as their superior, the Privy Council in London. In 1856, Nawab Wajid Ali Shah of Oudh, who had been wrongfully deposed by the Company, moved to Calcutta to battle the Company at the High Court. However, he lost the appeal and died in Calcutta. His palace built in Kidderpore now serves as the headquarters of the South Eastern Railway.

Modern technology began to appear slowly in Calcutta. Calcutta became a Municipal Corporation in the lines of London in 1852. In 1853, the first telegraph line was established between Calcutta and Diamond Harbour. The East India Railway Company was incorporated in London. The first rail track was laid in India between Howrah and Hooghly, and Calcutta may have had the honor of having the first railroad system in the region but for a shipwreck that sank the locomotive being imported from England for the purpose. The first train therefore ran from Bombay to Thana in 1853.

The English employees of the Company and their families introduced sports hitherto unknown in Asia. The Ballygunge Cricket Club was established in 1792 and continues to this day as the Calcutta Cricket Club, the oldest cricket club outside the United Kingdom. The Dum Dum Golfing Club, now Royal Calcutta Golf Club was established in 1829. Its new golf course in Tollygunge is the oldest golf course outside the British Isles, and is one of the finest golf courses in Southeast Asia. Horseracing started in 1798, and the present race course has been in existence since 1819. Bengal Club, Calcutta's most exclusive club was opened in 1827. The club's facade on Chowringhee Road is now gone, replaced by the ugly monstrosity of Chatterjee International Center, Calcutta's tallest building. Asia's first country club, Tollygunge Club was established in a disused indigo plantation in 1825, and continues today as one of the most prestigious clubs in the region.

The hundred year rule of the East India Company saw Calcutta turn from a sleepy little hamlet to a bustling metropolis. The Company had carried out the commands the King and Parliament of England and its end was nigh. In 1854, the properties of the East India Company were vested in the Crown. In 1857, the first major rumble of unrest against Company rule was heard as the First War of Independence erupted all over northern India. While Calcutta remained totally unaffected by the war, Queen Victoria and the Parliament were convinced that the Company would no longer be able to rule. While the war failed to bring independence to India, it ended the East India Company.

In 1858, the possessions of the East India Company became a Crown Colony and Calcutta became the Royal Capital. The Queen never visited Calcutta, but she appointed a Viceroy and Governor-General of India who replaced the Governor-General of the East India Company. Calcutta's role continued to grow under the direct rule of the British Crown.