The Kangra Valley has Buddhist roots dating back over 2,000 years; in 635 AD a Chinese pilgrim recorded fifty monasteries housing over 2,000 monks in the valley. However, Buddhism was gradually replaced by a resurgent Hindu culture, which integrated Buddha as a reincarnation of the god Vishnu.

The valley was threatened briefly by Alexander the Great during his abortive Indian conquest of 326 BC and raided by the fearsome Mahmud of Ghazni from Afghanistan in the 10th century, who sacked the ancient Kangra fort (pictured left).The Kangra district was most recently annexed by the British in 1848. Military jurisdiction only lasted a few years; Dharamsala's later incarnation as a British hill resort still lingers in the memory of some of the older inhabitants. Despite these incursions, the Maharaja of Kangra can trace his ancestry over 2,000 years, vying with the Japanese Imperial dynasty for the world's longest unbroken royal lineage.

In 1905 a severe earthquake wrecked much of the Kangra district, including Dharamsala and McLeod Ganj (named after a British Lieutenant-Governor of Punjab). The town lay abandoned until 1960, when the Indian government offered McLeod Ganj to the Tibetan Government-in-Exile, headed by the 14th Dalai Lama. Today, McLeod Ganj is home to over 8,000 Tibetan refugees.