Hørsholm was originally founded by the king in connection with the construction of Hirschholm Palace. Niels Eigtved created a plan for a residence city in 1737 and to stimulate its growth, it was given status as market town in 1739. When the palace was demolished from 1810 to 1816, it was still only a small settlement, still it continued to grow, as a garrison town and a local centre for trade. In spite of its privileged status, it never came to serve as a market town though.
Hørsholm gradually grew together with Usserød, which since the late 18th century had been the site of two textile factories, and Rungsted and Smidstrup on the coast.
Most recently, Hørsholm has grown together with Kokkedal in Fredensborg-Humlebæk Municipality and Trørød, Vedbæk and Gammel Holte in Rudersdal Municipality
