Manali's history is steeped in myth and ancient tradition. According to Hindu mythology, the town is named after the sage Manu. It is believed that after a great deluge destroyed the world, Manu stepped off his ark in Manali to recreate human life, making the area a sacred pilgrimage site. The indigenous tribes of the Kullu Valley, primarily nomadic herders and farmers, inhabited the region for centuries, developing a distinct culture characterized by the worship of local deities and the construction of traditional *Kath-Kuni* (wood and stone) homes.
During the era of British colonial rule in the 19th and early 20th centuries, the Kullu Valley caught the attention of British officers seeking respite from the sweltering Indian plains. The British introduced apple orchards and trout farming to the region, both of which radically altered the local economy and remain vital industries today.
Manali's modern evolution into a tourism powerhouse began in earnest in the late 20th century. During the 1980s and 1990s, as political unrest deterred tourists from visiting the neighboring state of Jammu and Kashmir, Manali emerged as a safe, peaceful, and equally stunning alternative. The influx of both domestic and international tourists spurred rapid commercialization. In 2020, the historic inauguration of the Atal Tunnel under the Rohtang Pass marked a new era in Manali's history, solving the age-old problem of the region being cut off during severe winter months and significantly boosting trade and strategic movement.