The oldest human traces found in Villach date back to 3500 BC. Many Roman artifacts have been discovered in the city, as it was near an important Roman road called the Römerweg. A document mentions a bridge in what is today Villach in 878, and the settlement across the bridge was given market town status in 1060, though Villach is first mentioned in records in 1240. Villach's first mayor took office in the 16th century.
On January 25, 1348, an earthquake destroyed a large part of Villach, followed by another earthquake in 1690. There were also several fires in Villach, which destroyed many buildings.
In 1759 Empress Maria Theresa of Austria formally purchased Villach, as well as much of Carinthia. During the Napoleonic Wars, Villach was part of the Illyrian provinces of the French Empire from 1809 until 1813.
The Südbahn railway finally reached Villach in 1864, providing growth and expansion.
During the period of the German Anschluss (1938–45) when Austria was annexed to Nazi Germany, the mayor of Villach was Oskar Kraus, an enthusiastic Nazi. A memorial for the 1919 border conflict caused controversy when it was inaugurated in 2002, as Kraus, who had not been especially prominent in the conflict, was the only person named.
During World War II, allied forces bombed Villach 37 times. About 42,500 bombs killed 300 people and damaged 85% of the buildings. Nevertheless the city quickly recovered.
Today, Villach is a bustling city with commerce and recreation, yet it retains its historic background
