Theni District was formed by the bifurcation from the former Madurai District as per G.O. Ms. No. 679 Revenue Department dated 7 July 1996.

Consequent to the bifurcation, one new Revenue Division with headquarters at Uthamapalayam and two new Taluks at Theni and Bodinayakanur were also created with effect from 1 January 1997.

Theni Municipal town was only a firka headquarters until 31 December 1996.

Consequent to the formation of the new District, Theni Municipal Town was upgraded as the Taluk and District headquarters on 1 January 1997.The region covered by present-day Theni District was sparsely populated before the 1900s.

In 1886 Mullaperiyar dam project bought some part of the water from Periyar River downhill to the Cumbum Valley and merged it into the Mullayar River.

This project helped more people to settle down in Cumbum Valley. Also to be noted that Theni was itself was a small though lesser-known town by the 1900s. After the Mullay-Periyaar merger project, many people from nearby arid regions (Sivakasi, Kovilpatti, Virudhunagar, Sattur and several nearby towns) settled in Cumbum-Valley (present day Theni District). So there was influx of people by the 1890s to 1920s. Bodi and Periyakulam were famous places at that time.

Later Theni developed rapidly due to commerce.