In the 16th century, the Faujdar of Bakla Sabi Khan settled in the village of Gaila with members of the Mughal Army.

The status of Agailjhara Thana was upgraded to upazila (sub-district) on 7 November 1983 as part of the President of Bangladesh Hussain Muhammad Ershad's decentralisation programme.

Agailijhara has an average literacy rate of 56.67% (7+ years) and a sex ratio of 1064 females per 1000 males.

In the 2001 Bangladesh census, Agailjhara had a total population of 155,661 whereby males accounted for 50.23% (78,193) of the community, while 49.76% (77,468) were women.

Agailjhara Upazila is divided into five union parishads: Bagdha, Bakal, Gaila, Rajiher, and Ratanpur.