Killarney featured prominently in early Irish history, with religious settlements playing an important part of its recorded history. Its first significantly historical settlement was the monastery on nearby Innisfallen Island founded in 640 by St. Finian the Leper, which was occupied for approximately 850 years.

Innisfallen (from Irish: Inis Faithlinn, meaning "Faithlinn's island") is an island in Lough Leane, one of the three Lakes of Killarney. It is home to the ruins of Innisfallen Abbey which was founded in 640 by St. Finian, and was occupied until the monks were dispossessed in 1594, by Elizabeth I, Queen of England. According to tradition, the Irish High King Brian Boru received his education at Innisfallen.

Aghadoe, the local townland which overlooks present day Killarney, may have begun as a pagan religious site. The site has also been associated with the 5th century missionary St. Abban, but 7th century ogham stones mark the first clear evidence of Aghadoe being used as an important site. According to legend, St. Finian founded a monastery at Aghadoe in the 6th or 7th century. The first written record of a monastery dates from 939 AD in the Annals of Innisfallen where the Aghadoe monastery is referred to as the "Old Abbey."

Following the Anglo-Norman invasion of Ireland in 1169, the Normans built Parkavonear Castle, also at Aghadoe. The castle was perhaps intended as an early warning outpost due to its views of the entire Killarney valley and lakes region.

Ross Castle was built on the lake shore in the late 15th century by local ruling clan the O'Donoghues Mor (Ross). Ownership of the castle changed hands during the Desmond Rebellions of the 1580s to the Mac Carty Mor.

Muckross Abbey was founded in 1448 as a Franciscan friary for the Observantine Franciscans by Donal McCarthy Mor. The abbey was burned down by Cromwellian forces under General Ludlow in 1654, and today remains a ruin.

Killarney was heavily involved in the Irish War of Independence. The town, and indeed the entire county, had strong republican ties, and skirmishes with the British forces happened on a regular basis. The Great Southern Hotel was for a while taken over by the British, both as an office and barracks, and to protect the neighbouring railway station. One notable event during the war was the Headford Ambush when the IRA attacked a railway train a few kilometres from town.

However, divisions among former colleagues were quick to develop following the truce and treaty, and Killarney, like many other areas, suffered in the rash of increasing atrocities during the Civil War. A day after the Ballyseedy massacre, five Republican prisoners were killed in Killarney by Free State forces.

Killarney was granted town commissioners under the Towns Improvement (Ireland) Act 1854, which was converted to an urban district under the Local Government (Ireland) Act 1898, and a town council under the Local Government Act 2001. The Local Government Reform Act 2014 dissolved the town council with the creation of Killarney Municipal District under the authority of Kerry County Council. Killarney Town Hall was erected in Kenmare Place in around 1930.

Killarney's tourism history goes back at least to the mid 18th century, when Thomas, fourth Viscount Kenmare (LordKenmare), began to attract visitors and new residents to the town. The date of 1747 was used in recent 250-year celebrations to honour the history of Killarney tourism. A visit by Queen Victoria in 1861 gave the town some international exposure.

Killarney benefited greatly from the coming of the railway in July 1853. British trade directory publisher Isaac Slater noted that there were three hotels in the town in 1846 but by 1854, one year after the coming of the railway, James Fraser named seven hotels and described their locations:

the Railway Hotel opposite the Railway Station; the Kenmare Arms and Hibernia which are on the main street and immediately opposite the church... the Victoria which is about a mile [1.5 km] to the west of the town on the shores of the Lower Lake; the Lake View which is about the same distance to the east of the town and also on the shore of the Lower Lake; the Muckross about two and a half miles [4 km] away and near the Muckross Lake and the Torc which occupies an elevated site about a mile and a half [2.5 km] from the town on the hill which rises immediately over the Lake Hotel.

In 1858, Irish born Victorian journalist, Samuel Carter Hall named O'Sullivan's Hotel and the Innisfallen rather than the Hibernia and Torc, but Isaac Slater also named the Hibernia in 1846. At the time he was writing, tours of the Ring of Kerry were already an industry and Killarney was considered the starting point of the 175-kilometre (110 mi) circuitous route. He was fascinated by the horses' endurance on the two-day trip, and leaves clear advice for other travellers;

It is a common and wise custom of those who make this tour, and are not pressed for time, to hire the carriage at the hotel in Killarney and continue with it 'all the way round.' It is absolutely marvellous what these mountain bred horses can get through "thinking nothing" of thirty miles [50 km] for days together or even fifty miles [80 km] in a single day.

As part of the trip, he noted that there were hotels in Glenbeigh and Waterville along with a "comfortable inn", which is now The Butler Arms Hotel.

TRAVEL, was an American travel magazine, published from 1901 to 2003.
PUBLISHED BY ROBERT M MCBRIDE AND COMPANY.  THe magazine was first published in 1901 as the Four-Track News by the New York Central Railroad. It was sold in 1906, and went bankrupt in 1946. The title was bought out of bankruptcy by Herman Shane.

Travel merged with the competing magazine Holiday in 1977, BECOMING TRAVEL HOLIDAY.