The exact origin of the city name is not known, but it is derived from the Lithuanian word beržas (which means birch).

[1] The name of the city in other languages includes German: Birsen; Polish: Birże, Russian: Биржай (and pre-1917 Биржи); Yiddish: בירז, romanized: Birzh.

[3] In 1575, as preparation for the castle's construction, a dam was built at the confluence of the Agluona and Apaščia Rivers, and the artificial Lake Širvėna, covering about 40 km2 (15 sq mi), was created.

Later, after his daughter, Barbara Radziwiłł married the Grand Duke of Lithuania and King of Poland Sigismund II Augustus in 1547, the power and influence of the family grew immensely.

The local community of Lithuanian Jews, which settled in the Duchy of Biržai at the end of the 16th century, was influential, establishing an interest-free loan society, two major flour mills, and an international linen export business.

The town's population suffered greatly due to wars and religious conflicts between the Protestants and Catholics.

The Radziwiłłs lost their wealth and influence, and Biržai was sold to the Tyszkiewicz family to cover debts in 1811.

In 1849–1862, the Tyszkiewicz family built the neoclassic Astravas Manor palace across the lake from the site of the original castle.

With the help of the European Union's Development Assistance grants, the town was able to regain a unique style: Since 2014, numerous apartment building renovations were carried out with more planned.

The road infrastructure is also being improved and some new construction, built to attract visitors and to restore the historic appearance, is in progress.