The history of Ratnanagar is deeply intertwined with the natural landscape of Chitwan. Originally inhabited by indigenous Tharu communities who developed unique adaptations to the subtropical climate and wildlife, the region remained relatively isolated until the mid-20th century.

In the 1950s, with the eradication of malaria, people from the hills began to settle in the region. The establishment of Chitwan National Park in 1973 marked a turning point, bringing conservation efforts and eventually tourism to the forefront of local development.

Ratnanagar was officially established as a municipality in 1997, bringing together several village development committees. Since then, it has grown into an important hub for eco-tourism, agriculture, and education in the region.