Ipoh grew out from the Malay village of Palau along the banks of the Kinta River in the 1880s. Its geographic location in the rich tin-bearing valley of the Kinta River made it a natural centre of growth.

The Great Fire of Ipoh in 1892 destroyed over half the town, but also presented an opportunity to rebuild the town in a more orderly grid pattern. Ipoh was subsequently rebuilt in time for the second tin rush and grew rapidly as a result of the booming tin mining industry, particularly in the 1920s and 1930s.

A local Hakka miner, millionaire Yau Tet Shin, started developing a large tract of the town in the early 1930s, today known as the 'New Town', from the eastern bank of the Kinta River to Greentown. In 1937, Ipoh was made the capital of Perak, replacing Taiping.

Ipoh was invaded by the Japanese on 15 December 1941. In March 1942, the Japanese Civil Administration or Perak Shu Seicho was set up at the St. Michael's Institution. After the liberation of Malaya by British forces, Ipoh remained the capital of Perak to this day.

The decline of the tin mining industry during the latter half of the 20th century caused the growth of Ipoh to stagnate. With the closure of the tin mines, its urban population was forced to seek employment in other cities within Malaysia. In spite of this, Ipoh remains one of the largest cities in Malaysia in terms of population, with tourism now a main driver of the city's economy.

Ipoh gained Municipal status in 1962, and in 1988, was declared a city by the then Sultan of Perak, Sultan Azlan Shah.