Lærdal has been inhabited for at least 6,000 years and in some places the valley has been used since the Early Stone Age. Lærdal has always been on the main road between east and west Norway. the first public postal route was established through Lærdal in 1647 and today it is a hiking path. 

The area at the end of the town by the fjord was a market place from as far back as the Middle Ages. The market is first mentioned in 1596, but it was not new then. 

Viking graves have been found at Balehaug. The statue of King Bele is placed on one of the mounds.

The Kviknes Hotel was established in 1877 and is run by the Kvikne family. The historic building is designed in the Swiss style and was the largest wooden building in Norway when it was completed. The newer building from the 1960s was built in concrete. Emperor Wilhelm II visited Balestrand and was a guest of the hotel. Because of the hotel, Balestrand has a long history with tourism.

The earliest inhabitants lived by hunting and fishing until they gradually started farming about 2,000 years ago. Agriculture is still important with the rich valley floors and abundant mountain pastures. As in all of western Norway, the area was overpopulated in the middle of the 19^th century, and cotters were forced to clear land far up the mountainsides. This is one of the major reasons there was mass emigration to the United States.

Tourism came in the late 19^th century, with cruise ships coming from England to take part in fishing and hunting. Later on, tourists came to admire the beauty of the region.

Årdal has historically been a municipality for heavy industry. The first industrial company, Årdal Kobberverk, started back in 1702. In the early 20^th century, the Germans also established mining here. The Aluminium works today was established by Germans during World War II, and it’s still a major business here today.