Lahti village was born on the shore of the lake Vesijärvi on the Salpausselkä ridge along the Ylinen Viipurintie road from Hämeenlinna to Vyborg. Good connections in all directions helped development of the city. According to tradition, the first house called Anttila moved from the village of Järvenpää, which was located on the eastern end of Joutjärvi. The houses of the village of Lahti were situated around the market square, forming so called raittikylä ryhmä. The name Lahti was first mentioned in written sources in 1445, but the area must have been inhabited during the Iron Age. The medieval Lahti was one of the biggest villages of the Hollola parish. According to the list of 1539, there were 23 houses in Lahti at that time, only 20 in 1634. By the middle of the 18th century the village had 76 inhabitants, in 1800 – 420 inhabitants, in 1875 – about 600 and 1905 – 3000 inhabitants.

On June 19, 1877, at about 9 am, a fire had begun in the kitchen of the Marola House destroying almost the entire village of Lahti. The roofs of the houses were made by very flammable materials like shingles and thatch, so they were easily ignited by a slight spark and to make things worse, the breezy north wind helped spread the fire. The village was consumed by the fire destroying 40 houses, a total of nearly 300 buildings, leaving only a few saved. Fortunately, there were no deaths and the livestock and domestic animals were mainly rescued and transported to Kolkanmäki. Various rumors circulated about the cause of the fire; most likely, however, came from children who were playing or cooking. The Lahti village fire memorial plaque is in the southwest corner of the market square. Although the fire caused great material damage, on the other hand it contributed to the renewal and development of Lahti with a better city planning and helping to transform the village into a market town. In 1878 Lahti was granted commercial rights, and the current town plan with its street networks was created.

The first plans for Lahti become a city had already been in the mid-18th century. When Lahti received the railway and the lakes Vesijärvi and Päijänne were connected by a canal, it was taken for granted that the village would become a city and Lahti finally got the city rights on November 1, 1905. However, due to the Grand Strike, information on the granting of city rights was not obtained until 18 November 1905 and Lahti was the last Finnish city to receive the signature of the Russian tsar.

Historical legacy can also be seen in Lahti today like for example former village houses such as Hennala, Hörölä, Kartano, Marola, Nikkilä, Paavola, Saksala have survived today as the names of suburbs and neighborhoods.

Between 1939 and 1950, Lahti’s population grew faster than other cities, with nearly 10,000 migrants moving from Vyborg and its surrounding areas, and by the year 1950, one fifth were immigrants from Vyborg. Numerous business operators moved from Vyborg and other parts of Karelia to Lahti (eg Starckjohann, Torkkelin Paperi, Vyborg Homemade Bakery, Koiviston Auto, Lahti Stamp Factory, Vyborg Pawn Shop), as well as small number of port entrepreneurs, Vyborg Music Institute and Deaconess School.

In 1960, Lahti had a population of 66,800 and today it is 120,000. Lahti is now the eighth largest city in Finland and the Päijät-Häme Provincial Center.