The history of Dharmanagar is deeply intertwined with the ancient Kingdom of Tripura. The city finds mention in the *Rajmala*, the celebrated royal chronicle of the Manikya dynasty, which ruled Tripura for centuries. During the monarchical era, Dharmanagar was an important frontier settlement that helped safeguard the kingdom's northern borders and facilitated trade with neighboring regions.
Following the partition of India in 1947, Dharmanagar experienced a significant demographic shift. It became a primary settlement area for Bengali Hindu refugees fleeing East Pakistan (now Bangladesh). This influx transformed the town from a quiet frontier outpost into a bustling commercial center, fundamentally shaping its modern cultural and linguistic identity.
For decades post-independence, Dharmanagar held a unique distinction in Tripura's modern history: it was home to the state's only railway station. Until the railway network was expanded to Agartala and beyond in the 21st century, Dharmanagar was the sole railhead connecting the landlocked state to the rest of the country, cementing its status as an indispensable economic lifeline.