The city was founded by the founding of an ancient fortress on a strategically located hill east of the current city center. No remains of this structure remain today. In Byzantine times, a castle was built on the same spot, around which the historic upper town, which still exists today, developed. Some historic buildings still exist in the immediate vicinity of the castle. It was not until the 20th century that the settlement core shifted westwards, down to the plain in front of it. The modern lower town with its spacious main square is now a transport hub, the economic center of the region and the administrative seat of the Greek Orthodox Church.
Kyparissia was recognized as a rural municipality (kinotita) in 1912 and upgraded to a city municipality (dimos) in 1944. On the occasion of the administrative reform in 2010, it was merged with five other municipalities to form the new municipality of Trifylia.