Before the First Nagorno-Karabakh War, butter, wine and brandy, machine, and silk factories, and an airport and two railway stations functioned there.

[4][5][6] As part of the agreement that ended the 2020 Nagorno-Karabakh war, the town and its surrounding district came under Azerbaijani control on 20 November 2020.

[9][10][11] Another possibility presented by Azerbaijani authors is that it was derived from ancient Turkic glossary meaning "small fortress".

Aghdam was founded in the middle of the 18th century by Panah Ali Khan Javanshir after taking control of Shusha and ordering the construction of a hunting resort in the area.

The first inhabitants of Aghdam were Azerbaijani Turks who came under the incentive of Panah Ali Khan; later various other Turkic tribes from Persia migrated and established a settlement here.

[21][22] According to Human Rights Watch, Armenian forces exploited the power vacuum in Azerbaijan at the time, and seized Aghdam in July 1993.

[24] HRW considered these actions serious violations of the rules of war, but noted that given the tit-for-tat nature of the conflict, it considered the actions of Aghdam Armenian forces a revenge for the Azeri destruction of Mardakert, which, according to Thomas Goltz, who was in Mardakert in September 1992, became "a pile of rubble", noting "more intimate detritus of destroyed private lives: pots and pans, suitcases leaking sullied clothes, crushed baby strollers and even family portraits, still in shattered frames".

[21] The Armenians used the city as a buffer zone until November 2020; as a result, Aghdam was empty, decaying, and usually off-limits for sightseeing.

Western diplomats reported unearthed graves and only just one damaged tombstone remaining in the Imarat Garvand cemetery.

[40] Its derelict condition, including a purportedly missing roof, drew criticism from Azerbaijani and Turkish communities, who wrote a letter in 2010 to Pope Benedict XVI asking him to "warn Armenians".

[41] In 2009, Shahverdyan then-head of Nagorno-Karabhakh's tourism department reported that the upper roof of the mosque had been restored in early 2009 and that their surroundings were cleaned from rubble and fenced in order to preserve Muslim cultural heritage in the area.

[45] As part of the agreement that ended the 2020 Nagorno-Karabakh war, the town and its surrounding area were returned to Azerbaijani control on 20 November 2020.

Inside the city, a large green belt covering an area of 125 hectares, an artificial lake, canals and bridges, motorways, pedestrian and bike paths, and electricity powered public transportation are also planned.

Before the First Nagorno-Karabakh War, butter, wine and brandy, machine factories and a railway station functioned in the city.