The town has existed since the 3rd century BCE (Satavahana period) when, according to Ptolemy, it was known as Maisolos. The Periplus of the Erythraean Sea calls it Masalia in the 1st century BCE. The port is located on the southeastern, or Coromandel Coast, of India. Situated in the mouth of the River Krishna on the Bay of Bengal, the Masula port saw flourishing sea trade. The naming of the eastern gate of Charminar as Machili-Kaman (literally meaning "gate of fish", in this case specifically meaning a gate to the fishing town of Machilipatnam) testifies the symbiotic relationship between port and the capital.The East India Company built its first factory in India in Masulipatnam. It was a 17th-century port for French, British and Dutch trade. The port has a medium-size fishing harbour which can accommodate 350 fishing vessels and an active carpet-weaving industry. The other products from the town include rice, oilseeds and scientific instruments. This town is a railway terminus and an important educational centre. Andhra Bank was established in 1923 at Machilipatnam.
The area is vulnerable to storm surges caused by the frequent cyclones in the Bay of Bengal. The 2004 Tsunami affected many fishing villages around Machilipatnam. The Government and NGOs are involved in rebuilding and reconstructing devastated villages
