[7] The town was established in 1850[2] by Prince Mikhail Semyonovich Vorontsov, the Viceroy of the Caucasus, near an ancient silver/lead mine in the nearby Alagir Gorge.

During the Russian Civil War, in January 1919, Alagir was a scene of intense fighting, which resulted in heavy casualties in Georgian population and difficult flight of the survivors through the mountainous passes into Georgia.

The Soviet leader Vladimir Lenin commented on the incident, blaming "counter-revolutionaries" for atrocities in Alagir,[8] which Georgians tend to attribute to the Ossetian radicals.

[citation needed] During World War II, on November 5, 1942, the German III Panzer Corps and Romanian 2nd Mountain Division[10][self-published source?]

[4] The town's economy is still dominated by mining and mineral extraction, but it also has significant woodworking, canning, and manufacturing industries.