[3] Formerly a part of Pangasinan province, Anao was founded and organized into a municipality on March 16, 1870.

In 1835, a group of immigrants from Paoay, Ilocos Norte reached the region and first settled near a creek on the bank where there were balete trees.

Located in the north-eastern part of Tarlac, it is bound on the north by San Manuel, on the east by Nampicuan, on the south by Ramos, on the west by Paniqui, and Moncada.

Other groups having a large number of members in the municipality are the Church of Jesus Christ of Latter-day Saints, Iglesia ni Cristo, and Protestantism.

[22] The town has over 10,000 ylang-ylang trees, many of them lined on the local main road, which are harvested and highly valued for its perfume.